The Real Cost of Bad Customer Experiences

Globally, organizations will put $3.7 trillion at risk in 2024 due to bad customer experiences – an increase of approximately $600 billion (19%) compared to projections from last year, according to new research from Qualtrics XM Institute. The data show that bad customer experiences lead directly to lost revenue.??

A single negative interaction can result in losing a customer, and their potential spending, in the future. On average, consumers say they have very negative experiences with organizations 14% of the time. And after half of all negative interactions, consumers either reduce their spending with that brand or stop spending with them altogether.

So what are effective ways to keep customers happy and loyal to your brand?

1. Invest in training frontline employees – it pays off. Qualtrics found that frontline workers like cashiers and restaurant servers have the worst morale compared to other types of employees and they feel a lack of support to effectively do their job. Additionally, only one third of frontline employees who have been with a company for less than six months intend to stay more than three years.?

1. Put the power of AI to work. More businesses with frontline workforces are exploring how to incorporate AI into their operations to capture efficiencies and relieve pressure points. The most common ways employees say AI technology can have a positive impact in the workplace are related to productivity, including automating routine tasks so they can focus on more complex work.
2. Listen to your customers. But, many companies are grappling with a growing reluctance among consumers to give direct feedback. Only one-third of consumers give direct feedback every time they have a bad experience with a company, but they provide feedback in less direct ways, such as in call center conversations, online chat, product reviews and social media posts. AI can analyze these unstructured forms of feedback and help companies build a richer understanding of what customers want and expect by tuning into both direct and indirect sources of feedback.

“While many industries reduced their share of bad customer experiences, the price of dissatisfaction has surged. The economic outlook remains delicate in 2024 and in today's market, the impact of losing a customer extends far beyond a single transaction.” - Bruce Temkin, head of Qualtrics XM Institute.

Read the full report here.

What else is new?

Consumer trust in the US is languishing. As organizations incorporate AI into customer interactions, trust will be more important than ever and a significant factor in how consumers feel about interacting with AI. However, trust has not recovered to pre-pandemic levels, and has even lost a little of the rebound it experienced in 2021, according to new data from the Qualtrics XM Institute. Find out which generations trust organizations the most and which industries are deemed most trustworthy.?

X4 Registration is OPEN! On May 1-3, 2024 in Salt Lake City, #QualtricsX4 will bring together more than 10,000 C-suite executives, thought leaders and experience management professionals for three days of learning, inspiration and connection. Hear from NBA Hall of Famer and businessman, Dwyane Wade, Olympic Gold Medalist and 8-time World Champion, Lindsey Vonn and many more at X4! Reserve your ticket now to take advantage of early pricing.

Customer success stories are our love language. ServiceNow is on a mission to raise the standard for customer experience in the enterprise software category. The first step? They needed to create a system to empower their frontline to close the loop and respond effectively to customer feedback. Read their story here.?

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