Issuu

August 2026

RADAR BUSINESS

Understanding the businesses driving Australia’s economy

THE RISE OF CUSTOMER E XPEC TATIONS

About this report Pitcher Partners Business Radar explores the trends, challenges and opportunities shaping Australia’s middle market. This report draws on independently commissioned research capturing the perspectives of 316 middle market business owners and leaders across a range of industries, states and growth stages. In this latest report, along with measuring business confidence we examine how economic pressures and new tech are reshaping customer expectations. The emergence of the AIpowered consumer raises the bar, demanding faster responses, higher quality and lower prices all at once. While trying to meet these competing demands is straining profit margins and supply chains, it is also compelling leaders to make clearer strategic choices and embrace technology faster than ever before. Those that succeed will be the businesses that can turn rising expectations into a source of competitive advantage.

Key findings

1 2 3 4 5

65% report an increase in customer expectations over the last 24 months

56% are prioritising quality in the face of conflicting customer demands Business confidence for growth in the next 12 months for the Australian (6.73) and global (6.83) economies has retreated to early-2025 levels AI is reshaping customer expectations 71% of businesses say customers expect faster service because of AI or automation, while 67% believe AI is raising the overall standard of service customers expect Rising expectations are putting pressure on profitability 45% of businesses say changing customer expectations are creating the greatest pressure on pricing, margins or overall profitability

Taken together, these findings point to a middle market that remains confident but is being tested in new ways. Customers are better informed, more price sensitive and increasingly conditioned by digital tools that promise instant answers and seamless experiences. Yet for businesses willing to adapt, these changing expectations also present an opportunity to sharpen their value proposition, deepen customer loyalty and accelerate innovation. For business leaders, the challenge is not simply to adopt AI or chase every customer demand. It is to decide where technology can genuinely improve the customer experience, where human expertise remains essential, and which expectations should be resisted because they undermine profitability, quality or strategic focus.

Read on to learn how rising customer expectations are reshaping the middle market and the practical steps your business can take to respond sustainably and profitably.

Contents 2

Middle market businesses back themselves

The informed and demanding customer

ustomer expectations are rising faster than C many businesses can sustainably respond

Actions to take

About Pitcher Partners

Our global reach

Middle market businesses back themselves 2

Middle market businesses back themselves After seven years of tracking middle market business confidence in Australia, it’s easy to see how these leaders will respond to shifting micro and macroeconomic trends. This Business Radar report is no different. As usual, the turbulent economic landscape only slightly dampened middle market business leaders’ outlook, especially as it relates to their own operations. They rate their current success at 7.98 out of 10 and future success at 8.15.

Middle market business confidence over time 8.44

8.35 8.14

8.25 7.73 7.68

8.11

8.14 7.99

7.84

7.91

7.69 7.70

7.77

8.03

8.15

8.05 8.14

7.98 7.81

7.80

7.61 7.42

2021

2022

Feb 2023

Jun 2023 Sep 2023 Feb 2024

Jul 2024

Feb 2025 May 2025 Aug 2025 Feb 2026 Jul 2026

Future success of the business Current success of the business

The timing of this and the previous surveys is interesting. Our first Business Radar survey of 2026 was taken just before an increase in global geopolitical actions, and this one follows the release of the Federal Budget. It paints a picture of gently lifting optimism throughout 2025 and early 2026 and then a slight dip as the effect of global instability and poorly received politics hit home. Despite this, our middle market is seemingly unshakable. When thinking about their own business prospects, this group hasn’t dipped below the high 7s in over six years, remaining steady while riding a half-decade roller coaster.

When you combine post-budget uncertainty with global tensions, it is natural that macroeconomic confidence is feeling a little rocky.

Chris Hanna, Partner, Pitcher Partners Adelaide

Confidence in the wider economy dips to 2025 levels Respondents are less optimistic about the outlook for their industry and the local and global economies. Confidence in the 12-month growth prospects for their wider industry is 7.58, a drop from the 7.87 recorded in early 2026. Similarly, confidence in the 12-month growth prospects for both the Australian (6.73) and global (6.83) business economies has retreated to early 2025 levels.

Middle market business confidence over time 8.23

7.42

7.53

7.10 6.55

6.69

7.20

8.00 7.64 7.37 7.22

6.19 6.39

7.00 6.84

7.69

7.46

7.15 6.75

6.97

6.73

7.69 7.37 6.99 6.81

7.87

7.58

7.23 6.96

6.83 7.08

6.63

6.73

6.09

5.80 2021

2022

Feb 2023

Jun 2023 Sep 2023 Feb 2024

Jul 2024

Feb 2025 May 2025 Aug 2025 Feb 2026 Jul 2026

12-month growth prospects – your industry 12-month growth prospects – Australian business economy 12-month growth prospects – global business economy

Technology and productivity This survey included two new factors that could be driving or holding back business confidence. Adoption of new technologies is arguably a refinement of the old category, technological innovation. It came in at the very top for positive drivers at 38%. Closely behind, and likely related, is another new category, improved productivity at 37%. Increased demand for products and services has dipped to 36% from 42% in the previous survey, but still well in front of the fourth and fifth place factors.

Positive factors impacting business confidence Adoption of new technologies

38% Improved productivity

37% Increased demand for products or services

36%

Every time we look at the economy, we’re always talking about how productivity is capping out, and that’s the biggest concern for Australia. But in the middle market, confidence around technology and productivity is improving. It’s quite a good outlook, not just for the mid-tier, but for the country.

Joshua Haque, Director, Pitcher Partners Perth

Consumer/customer tastes/preferences

26% Government stimulus and support measures

14% Improved productivity ranked among the top drivers of business confidence, highlighting a shift towards efficiency and innovation

Money on the mind The top negative factors impacting business costs all follow the sameAdoption theme: mounting financial pressure. Remaining of new technologies at the top at 36% is inflation, then the related category increased38% operating costs (32%), and two new categories, economic slowdown and recession risk (22%). Interestingly, geopolitical tensions (18%) and changing energy prices Improved productivity (17%) have nudged up only slightly from the last survey taken 37% before the start of the Iran conflict and its related impact on global supplies of oil, LNG and fertilisers to name but a few.

Negative factors impacting business confidence Inflation

36% Increased operating costs

32%

Increased demand for products or services

Economic slowdown or recession risk

36%

22%

Consumer/customer tastes/preferences

Changing interest rates

The uprising inflation rate, border-related 26% issues between countries and exchange Government stimulus and support measures rates negatively impacts my business.

21% Increased labour costs

14%

21%

Survey respondent

Inflation and operating costs remain the strongest negative influences, suggesting a focus on managing financial pressure and protecting margins in an uncertain economic environment

Efficiency overtakes demand For more than two years, one factor has held the top spot for positive and negative external factors impacting business confidence: increased demand for products or services. That streak ended in this latest survey, dropping to fourth to make way for new categories: adoption of new technology and improved productivity. This may signal a change in attitude. Businesses are no longer just getting confidence from more customers through the door but using tech-driven efficiency to get more value from them. Inflation holds steady at three and increased operational costs – a fixture in the top five since 2024 – has moved outside of the top five factors impacting confidence.

1st

2nd

3rd

4th

5th

Adoption of new technology

Improved productivity

Inflation

Increased demand for products or services

Consumer tastes/ preferences

Increased demand for products or services

Technological advancement

Inflation

Consumer tastes/ preferences

Increased operating costs

Increased demand for products or services

Technological advancement

Increased operating costs

Consumer tastes/ preferences

Inflation

2026 June

2026

February

2025 August

New statements added in June 2026 survey

The informed and demanding customer 6

Researched, prepped and expecting much, much more In a competitive landscape, the goal posts are always moving. As one business discovers new ways of delivering better products faster and at a higher quality, its competitors are forced to adapt or lose customers. AI, with its unprecedented processing power and speed, has accelerated that cycle. This time, it’s not only driven by incremental improvements among competing businesses but also by intensified customer expectations. Australian middle market businesses have taken notice. Over two- thirds (65%) of those surveyed reported a slight or significant increase in customer expectations in the last 24 months. Only 7% reported a decrease.

27% Change in customer expectations in the last 24 months Increased slightly/increased significantly

Stayed about the same

65%

Decreased slightly/decreased significantly

2 in 3 middle market businesses have witnessed customer expectations increase in the last two years

Customers are arriving better researched, better prepared and often with a benchmark already in mind. That changes the dynamic – businesses need to be ready to explain value, not just quote a price.

Gavin Debono, Partner, Pitcher Partners Melbourne

Claimed drivers of changing customer expectations

46% Cost of living pressures

46%

Customers becoming more price sensitive

31%

Competitors offering faster or cheaper products or services

31%

Increased use or awareness of AI tools

30%

Customers being more informed before they engage

While AI is clearly accelerating the shift, the research suggests the more immediate trigger is economic pressure. Cost-of-living pressures and growing price sensitivity were the leading drivers of changing customer expectations, each nominated by 46% of respondents, ahead of competitors offering faster or cheaper products and increased use or awareness of AI tools, both at 31%. AI may be amplifying the behaviours, but customers are demanding more because they are more cost-conscious, better informed and have more options than ever before. At least two-thirds of respondents reported increased expectations for everything from products and services being Australian-made to cost transparency. Three-quarters say they’re under pressure from customers to respond faster to enquiries. Almost as many (73%) report increased expectations around product and service quality, and affordability or value for money. While it is important to respond to growing customer expectations, businesses that are not investing in more efficient processes and tools may find it increasingly difficult to deliver the speed, consistency and value customers now expect.

How have customer expectations increased? Speed of response to enquiries or requests

75% Quality of products or services

73% Affordability or value for money

73% Use of technology, automation or AI to make products or services faster, easier or more cost effective

70% Reliability of delivery, completion or turnaround times

69%

13%

Businesses that aren’t adopting efficient new processes and tools are likely to struggle to deliver on these demands

Rising expectations are reshaping the middle market Bridging the expectation gap is a matter of survival This shift in attitude over just two years coincides with the widespread adoption of large language models (like Claude or ChatGPT) and other tools powered by generative AI. We are witnessing, in real time, the arrival of the AI-powered customer. Customers now have instant access to what feels like objective and expert insight, helping them research and compare options in seconds. For instance, using ChatGPT to compare suppliers, creating AI-generated pricing comparisons, and procurement teams using AI to shortlist suppliers. Customers are far more informed (30%) before they reach out to businesses, making them more likely to question or negotiate quotes, fees and pricing, or ask for discounts. Because customer-facing AI looks so seamless, it’s also easy to underestimate the complexity and cost of integrating it across a business. This creates a gap between what customers expect and what the middle market can deliver sustainably. Middle market leaders say that because of AI or automation, customers expect faster service (71%), a broader offering (66%), more personalised service (63%) and lower prices (63%). These traditionally conflicting demands are creating challenges and opportunities. What businesses do next may determine their very survival. The pressure is especially evident in professional services, where 86% of respondents report increasing expectations around technology use. In a sector built on expertise and relationships, clients increasingly expect digital convenience and AI-enabled efficiency alongside trusted human advice.

You cannot be a custom home builder and compete on cookie-cutter prices and delivery times. Middlemarket businesses must explicitly decide what they are actually selling and have the confidence to walk away from customers demanding bargain-basement pricing.

Chris Hanna, Partner, Pitcher Partners Adelaide

Perception around AI

71%

67%

66%

Customers expect faster service because of AI or automation

AI is raising the standard of service customers expect

Customers expect easier ways to deal with businesses because of AI or automation

66%

63%

Customers expect a broader offering because of AI or automation

Customers expect more personalised service because of AI or automation

Customers expect lower prices because of AI or automation

Pressure spread unevenly The surge in expectation is also hitting the market unevenly. Larger middle market businesses with over 100 employees reported an upswing in expectation (~72%). By comparison, only 57% of smaller businesses (fewer than 100 employees) have experienced the same. Pitcher Partners’ experts suspect customers hold larger organisations to a higher standard. This makes sense, given larger or more mature businesses will likely also have more customer data, systems, brand recognition and capital to respond. These pressures are particularly acute in financial and property services. Ninety percent of businesses in the sector report increased expectations around response times, while 86% report greater pressure around delivery reliability and 81% around technology-enabled service. For businesses operating in regulated environments, meeting these demands while maintaining compliance and risk controls presents a significant challenge.

AI may democratise tools, but not necessarily data, brand, capital or scale. Larger businesses may be better placed to turn rising expectations into opportunity because they have richer customer datasets, stronger systems and more capacity to invest.

Joshua Haque, Director, Pitcher Partners Perth

Key numbers by industry

90%

Financial and property services: strongest pressure on response times (90%) and reliability (86%)

86%

Professional services: highest expectations for AI and technologyenabled service

80%

Retail, wholesale and distribution: highest expectations for value for money

78%

Construction and infrastructure: Highest expectations for delivering quality, with pressure on operating costs (43%) the highest across all industries surveyed

The impossible customer trade-off Historically, market pressures pull businesses in one direction at a time. A recession, for example, may drive demand for lower prices. The AI-powered customer, however, expects everything all at once: faster service, higher quality, lower cost. AI has fuelled the perception that there are traditional trade-offs that no longer exist, promising a world where speed, quality and price can all be optimised simultaneously. Business leaders know the reality is far more complex. Something, of course, has to give. Pricing, margins and overall profitability are taking the greatest hit for 45% of businesses – the next most noted pressures were chosen by only 29% or 30% of respondents. Construction and infrastructure businesses present an interesting contrast. While fewer than average report a broad rise in customer expectations (56%), they remain under intense pressure from operating costs (43%) while still being expected to maintain high standards of quality (78%) and delivery performance (65%). Retail, wholesale and distribution businesses appear to be feeling customer expectations primarily through a value lens. Four in five report increasing expectations around affordability and value for money, reinforcing the ongoing influence of cost-of-living pressures on purchasing decisions. Despite this immediate pain, the middle market is tapping out of a race to the bottom. When forced to prioritise one side of the triangle, 56% of businesses chose quality. Speed and price were almost even – 13% and 12% respectively.

The middle market cannot afford to drift into a race to the bottom. If a business competes on quality, expertise or trust, it needs to make that value visible and defensible.

Gavin Debono, Partner, Pitcher Partners Melbourne

Rising customer expectations are being viewed as a catalyst, not a crisis While customer expectations are increasing sharply, most middle market businesses are not seeing this as a purely negative development. More than half (54%) say changing customer expectations are creating both opportunities and challenges in equal measure, while a further 20% see more opportunities than challenges. Together, this suggests that nearly three-quarters of businesses recognise that shifting customer demands can drive innovation, stronger customer relationships and business improvement, even as they create pressure on margins, service delivery and operations. The challenge for leaders is no longer whether expectations are changing, but how to respond in a way that creates competitive advantage rather than additional complexity.

Queensland is leading this shift In Queensland, 76% of businesses reported an increase in customer expectations, well above the 65% national average. They’re also significantly more likely to see it as creating both opportunity and challenges (69%, compared with the 54% nationally). Rapid population growth, consistently strong economic activity over recent years and the lead-up to the Brisbane Olympics are helping reshape the business landscape, creating new opportunities while raising the bar for customer experience.

Higher for businesses with less than 100 employees (23%)

Higher in QLD (69%)

3% 7%

16% Impact of customer expectations on middle market business

54%

Higher in NSW (28%) and businesses with more than 250 employees (29%)

20%

They are creating both opportunities and challenges equally They are creating more opportunities than challenges They are creating more challenges than opportunities They are not having a significant impact on our business Not sure/NA

The most successful Queensland businesses will be those that harness the state’s growth momentum while responding to rapidly changing customer expectations. In a market shaped by population growth, major projects and digital disruption, customer experience is becoming a key driver of competitive advantage.

Anthony Kazamias, Partner, Pitcher Partners Brisbane

Where is it causing the greatest pressure or change in business? Pricing margins or overall profitability

45%

Customer service or responsiveness

30%

Product or service quality

29%

Operating costs

29%

Delivery or turnaround times

29%

Digital systems, technology or automation

26%

Ability to innovate or evolve product/service

24%

Supply chain, suppliers or inventory

23%

Staff workload or internal capacity

22%

Key action Justify your premium pricing

With an easy way to compare prices, customers will almost always default to the cheapest option unless you give them, and their AI tools, a reason not to. You must clearly articulate the value of your product or service and why it commands a premium. At a minimum, your online presence should have detailed case studies, customer testimonials and clear explanations of your offering’s value.

Sending pain down the supply chain Businesses are pushing increased pressure down the line. 54% of middle-market businesses report that rising customer expectations are forcing them to change how they interact with their own suppliers and partners. This may be an inevitable reality of the current market – squeezing the supply chain is one of the only ways to relieve margin pressure as they grapple with leveraging AI. Leaders say they are enacting stricter speed, quality and sustainability standards, establishing alternative relationships to counteract any lags, and pushing for sharper deals with more flexible payment terms. Given that 33% of mid-market businesses think supplier delivery or supply chain constraints stop them from acting on the customer feedback, we can expect this to be the beginning of even more shifts in the traditional models.

54% of mid-market businesses mention that changing customer expectations are impacting how their business interacts with suppliers, partners or service providers

Customer expectations are now an operating model question. Leaders need to connect service promises with pricing, technology, people, suppliers and governance.

Joshua Haque, Director, Pitcher Partners Perth

33% of mid-market businesses think supplier delivery or supply chain constraints stop them from acting on the customer feedback

If our customers are complaining too much about the price, then we have no option other than to also complain to suppliers or partners.

Survey respondent

They demand – can you deliver? So as customers demand more, the question is, what are businesses doing about it? The first step is to listen. Most businesses are doing just that, using mainly traditional and reactive methods: monitoring complaints (54%), gathering feedback from customer-facing staff (53%), and monitoring online reviews, ratings or social media feedback (48%).

How businesses are currently gathering feedback from customers Monitor complaints, issues or concerns

54% Gather feedback from staff or teams who interact with customers

The most common feedback channels focus on complaints, issues and frontline observations, which can help solve immediate problems but may not always provide the strategic insight needed to anticipate changing customer expectations

53% Monitor online reviews, ratings or social media feedback

48% Regularly ask customers for feedback

46% Review customer data, sales data or website/app data

45% Have regular conversations with customers outside formal feedback processes

While 92% of businesses say they act on feedback in some way, 44% say they only do so ‘when something needs to change’. This is compared with 32% who use it to drive broader business decisions. It may be that the remaining 68% would like to, but feel they can’t.

42% Conduct structured customer research

32% We do not currently track this

92% of businesses say they act on feedback in some way

2% 2% 1% 3% 16%

Action on customer feedback

44% We review it and act when something needs to change We use it to make business decisions or changes We mainly use it to fix individual customer issues We do not hear enough customer feedback to act on it Not sure/NA

32%

We hear it, but do not often act on it Customer feedback does not really influence how we run the business

The work involved in managing, understanding, and responding to customer feedback itself is also a challenge for respondents.

Challenges for businesses to act on customer feedback Pressure to keep prices low or protect margins

43% External factors outside our control i.e. inflation

Leaders need to decide which expectations align with their strategy, who owns the response, what operational changes are required, and where the business will deliberately say no. Without that discipline, feedback can pull the organisation in too many directions at once, increasing complexity without improving loyalty or profitability.

38% Cost of making changes is too high

37% Supplier, delivery or supply chain constraints

33% Customer feedback is unclear, inconsistent or hard to interpret

30% Existing systems or technology make it difficult

24% Internal priorities or lack of ownership make it hard to act

23% Limited staff time or internal capacity

23%

Chris Hanna, Partner, Pitcher Partners Adelaide

Nothing makes it challenging

Key action Zero in on feedback from your ideal customers

You can’t make changes to every suggestion or complaint, and you shouldn’t try. Go back to your strategic focus and your ideal customer, and ignore everything else. With this filter, you’ll be more likely to invest in the operational changes that will deliver to your ideal customers and future goals. 16

One of the biggest challenges is closing the gap between what customers tell you and what the organisation is actually able to change.

Survey respondents

Warning signs of a strained feedback engine

Insights for business

For many businesses, the problem is not a lack of customer feedback but rather the volume, speed and inconsistency of feedback arriving through multiple channels. Customers are leaving reviews, sending emails, responding to surveys, speaking to frontline teams and posting on social media, often with different expectations and levels of urgency. Without a clear process to triage, prioritise and act, feedback can quickly become noise rather than insight. Leaders should watch for early signs that their feedback systems are creating pressure rather than clarity: Feedback is collected but not owned: teams gather customer comments, but no one is accountable for turning them into decisions. Every complaint feels urgent: businesses react to the loudest or most recent issue rather than identifying patterns that matter most. Customer-facing staff become the filter: frontline teams are expected to interpret and escalate feedback without the tools or authority to act. Data sits in too many places: reviews, surveys, CRM notes, social media and sales data are not connected, making it hard to see the full picture. Operational teams are overwhelmed: customer expectations create follow-on work for delivery, service, product, technology or supplier teams without additional capacity. Changes are made without commercial testing: businesses respond to customer pressure without asking whether the change supports margin, positioning or ideal-customer strategy. Feedback loops are not closed: customers are asked for input but do not see evidence that the business has listened or improved.

Customer expectations are rising faster than many businesses can sustainably respond 18

When customer expectations are outpacing capacity

Insights for business

Customer expectations are rising faster than many businesses can sustainably respond. The risk is not just disappointed customers; it is margin erosion, service inconsistency, supplier strain and investment in technology that does not solve the right problem. Common indicators include:

1 2 3 4 5 6 7

Response times are improving, but quality is slipping Faster service is being achieved by cutting corners, increasing rework or relying too heavily on frontline judgement. Discounting becomes the default retention tool Teams use price to resolve dissatisfaction rather than explaining value or reinforcing the business’s chosen position. Technology is added before the process is fixed AI tools or automation are introduced into unclear workflows, which can amplify existing issues rather than solve them. Suppliers are being squeezed to absorb customer pressure Shorter lead times, tighter terms or higher standards are pushed down the chain without considering long-term resilience. Feedback is treated as instruction, not insight The business responds to individual requests rather than identifying the customers and expectations that matter most. Premium positioning is not backed by proof Customers are asked to pay more, but the business lacks case studies, reviews or clear value evidence to justify the difference. Customer experience is improving in pockets, not across the business Individual teams create workarounds, but there is no consistent view of what the customer should experience from first enquiry to delivery.

AI-driven changes: ready or not, here they come In our last Business Radar survey of 2025 conducted in mid August, 51% of businesses reported feeling fairly or fully ready to respond to industry shifts driven by generative AI. Less than a year later, that number has leapt to 73%. However, this self-reported readiness may be disconnected from reality. In written responses, businesses point to isolated use cases or capability development, rather than the wholesale evolution required to meet increased demand.

20% AI organisational readiness Fairly ready/fully ready to adopt and scale Neutral/partially ready Not at all ready/somewhat unprepared

73%

AI tools can generate content and even create software very quickly. But turning a flashy prototype into a robust solution that’s part of the business workflow is much harder, and requires discipline.

The readiness gap matters because customer expectations are not rising in isolated parts of the business. A chatbot may improve first response times, but it will not fix delayed fulfilment, inconsistent pricing, outdated customer data or unclear ownership of service issues. Similarly, AI-generated insights will only be useful if leaders have the processes, people and decision rights to act on them. Readiness should therefore be measured less by whether a business is using AI, and more by whether AI is connected to a clear customer strategy, reliable data and accountable operating rhythms.

We’re pretty ready. Our digital setup’s been upgraded, which lets us bring in AI tools. We’re using them to schedule projects more smartly, and they also help with automatic cost estimates.

Martin Koval, Client Director, Pitcher Partners Melbourne

Survey respondent

Turning AI readiness into real capability Each of our independent network firms across the country have a tailored approach to introducing AI into workflows. Looking at the network’s largest member firm, the response from Pitcher Partners Melbourne has focused on three areas:

1 Equipping our people

We are making enterprise AI tools available to our people and investing heavily in practical learning, experimentation and capability development. This includes helping teams identify where AI can remove administrative effort, accelerate research and analysis, and create more time for higher-value client conversations.

2 Embedding AI into real work

Rather than treating AI as another standalone technology, we are exploring how it can be incorporated into existing workflows and systems. The goal is not simply to generate content faster, but to improve responsiveness, consistency and access to the firm’s collective knowledge.

3 Maintaining trust and governance

As a professional services firm, we need to adopt AI in a way that protects client confidentiality, maintains appropriate human oversight and produces reliable outcomes. AI enablement and AI governance must progress together.

AI-efficiency is not without risk Global research from YouGov and Meltwater suggests that AI content isn’t acceptable to audiences in all areas. Fewer than 39% of customers find the use of AI acceptable in customer service, and 32% say they would trust a brand less if they knew its content or communications were AI-generated. The issue is that it feels like trickery. 63% of customers say they’ll lose trust in a brand if AI’s involvement is deceptive or misleading. 86% of customers say brands should disclose when content or interactions are generated by AI. In short, businesses face a seemingly unsolvable problem. Tell customers you’re using AI, and risk losing trust. Don’t tell them, and face even greater risk.

Clients are no longer asking whether professional services firms will use AI. They increasingly assume that we will. The opportunity is to use it to make our expertise more accessible, our service more responsive and our people more effective, without losing the judgement, trust and personal relationships that clients value most.

Brett Johnstone, Chief Information Officer, Pitcher Partners Melbourne

AI is not without risk

32%

Customers say they would trust a brand less if they knew it’s content or communications were AI-generated

63%

Customers say they’ll lose trust in a brand if AI’s involvement is deceptive or misleading

86%

Customers say brands should disclose when content or interactions are generated by AI

Avoid treating AI as a silver bullet

Use a customer-value filter before investing in AI

Technology can make things faster, better or cheaper but it can also backfire if you implement it without care for customer trust. Instead of deploying chatbots to make service faster as the only solution, think about how AI could improve your customer experience in your specific business. If you’re focused on premium quality and expert human relationships, for example, AI would be better suited to freeing your people to spend more time with customers, not less.

Before adopting a new AI tool, test it against five questions:

The businesses likely to thrive won’t be those that replace human interaction with AI, but those that use AI to make human interactions more valuable.

• What could go wrong for customer trust? Identify where disclosure, review or human oversight is required.

In this environment, focus becomes a competitive advantage. The clearer a business is about who it serves and what it stands for, the easier it is to decide where to invest, where to automate and where to say no.

Gavin Debono, Partner, Pitcher Partners Melbourne

• Which customer expectation does this address? Speed, quality, price, personalisation, transparency or convenience? • Does it support our chosen position? For example, premium expertise, fast delivery, specialist advice or best-value service? • What human work will it improve, not just replace? Consider whether AI frees people to spend more time on judgement, relationships and problem-solving.

• How will we measure commercial return? Track margin, repeat business, service resolution, customer satisfaction or productivity, not just adoption.

Actions to take

Insights for business

Relentless and often conflicting customer expectations are the new normal. The goal is not to meet every demand. It is to choose the expectations that align with your strategy, invest in the capabilities that matter most, and protect the profitability and quality that make your business worth choosing. Key actions to take:

1 2 3 4 5 6 7

Define your ideal customer and commit to them Trying to satisfy every customer is a fast track to margin erosion. Be clear about who you serve best, what they value and which demands sit outside your strategy Choose your position: speed, quality or price Customers may want all three, but most businesses cannot deliver all three sustainably. Decide where you will compete and align service, pricing and technology decisions to that choice. Prove the value behind your price If you charge a premium, make the evidence easy to find. Use reviews, testimonials, case studies, service guarantees and clear explanations of what customers receive for the price and deliver on your promises. Turn feedback into a decision system Do not collect feedback unless you have a process to assess, prioritise and act on it. Focus first on feedback from ideal customers and recurring issues that affect commercial outcomes. Use AI to strengthen the customer experience, not disguise weaknesses AI should improve the parts of the experience that matter most to your customers. Avoid using it as a superficial fix for unclear processes, under-resourced teams or poor service design. Measure AI return beyond productivity Track whether AI is improving margin, quality, customer retention, speed to resolution or staff capacity. Include implementation, training, governance and rework costs in the calculation. Build supplier partnerships instead of passing on pressure Pushing customer pressure down the supply chain may provide short-term relief, but it can undermine resilience. Work with key suppliers to solve shared delivery, quality and cost challenges.

About Pitcher Partners 145+ partners

1,300+ people

independent member firms

9th

largest network of accounting and advisory firms National statistic as at 1 July 2025

We’re ready to help you thrive Since day one we’ve been helping businesses, families and individuals intelligently frame their goals and make the most of their potential. Today, we’re one of the largest accounting, audit and business advisory firms in Australia. We work with middle market businesses, from family-run companies to renowned industry leaders and iconic brands. And help families and individuals manage their wealth across generations. If you’ve got ambition, we’re the team you want on your side.

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$6.8bn worldwide revenue 2025 (USD)

Global statistic as at December 2025

Baker Tilly International

Pitcher Partners

Experts across a wide range of industry and business sectors, each Baker Tilly International member firm combines highquality services and in-depth local knowledge. Sharing knowledge and resources, our business approach brings together the power of the global network to deliver exceptional results to clients globally.

Pitcher Partners is an independent member of Baker Tilly International. Pitcher Partners’ strong relationship with other Baker Tilly International member firms, particularly in Asia-Pacific, provides clients with access to international networks, opportunities and expertise to expand globally.

Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

Chris Hanna Principal – Adelaide p +61 8 8179 2800 e chris.hanna@pitcher-sa.com.au

Joshua Haque Director – Perth p +61 8 9322 2022 e haquej@pitcher-wa.com.au

Gavin Debono Partner – Melbourne p +61 3 8610 5331 e gavin.debono@pitcher.com.au

Anthony Kazamias Partner– Brisbane p +61 7 3222 8390 e akazamias@pitcherpartners.com.au

Jyotika Rangel Partner – Sydney p +61 2 8236 7811 e jyotika.rangel@pitcher.com.au

Peter Lawrence Partner – Newcastle p +61 2 4923 4000 e peter.lawrence@pitchernewcastle.com.au

Sudha Viswanathan Partner – Melbourne

p +61 3 8610 5235 e sudha.viswanathan@pitcher.com.au

Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.

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