In two separate Qualtrics studies, the importance to consumers of good CX took center stage as fallout from the reverse—shoddy or poor CX—translated into a risk of staggering trillion-dollar losses for businesses worldwide and to consumers either stopping or cutting back their spending.
In the first study, which examined how consumers respond to bad CX, the findings revealed that the total value of sales at risk worldwide each year because of poor CX amounted to $4.7 trillion—$3.0 trillion from consumers who cut back on spending, and $1.7 trillion from consumers who stopped spending altogether.
In the second study, poor customer service was the second most common reason—just below high prices and fees—as to why people cut spending.
Both studies were conducted by the Qualtrics XM Institute, an experience management research center that studies trends and emerging practices in how organizations interact with their key stakeholders, including suppliers, employees, customers, and partners.
In the first study, data collected from 18,000 people in 18 countries also showed a second set of compelling data. Among the 18 countries that collectively accounted for 72% of global household consumption spending, the value of at-risk sales from companies delivering poor customer service reached $3.6 trillion—lower than the worldwide total, but still of massive significance.
Brazil saw the highest percentage of sales at risk among the top 18, reaching 15.2% of total consumption. When considering total value in absolute numbers, the US ranked number 1, with $1.9 trillion worth of sales at risk. Germany was second, followed by India, Japan, and Brazil, as the table from the Qualtrics XM Institute shows below.
In the second study, the findings indicated a pervasive dissatisfaction among nearly all consumers with their experiences as customers in 2021. Moreover, approximately one in five consumers reported having a negative interaction with an organization every 90 days.
Collecting input from more than 23,000 consumers in 23 countries about their experiences with companies in 2021, the study found that 80% of people believe CX needs to be improved, and 63% said companies must become better at listening to their feedback.
The study’s respondents rated government agencies, internet service providers, mobile phone providers, and airlines as among the most likely to deliver poor CX. Conversely, consumers during the pandemic era were least likely to report a bad experience with supermarkets, streaming media services, department stores, and fast-food restaurants.
“As people’s expectations have changed, companies haven’t kept up, perhaps waiting for the world to revert back to ‘the old way.’ Well, that’s not going to happen,” said Bruce Temkin, head of the Qualtrics XM Institute, which conducted the study. “As customers flocked to digital over the past 18 months, companies have made some initial changes but have failed to consistently respond, leading to fragmented and frustrating customer journeys and support as they switch from one channel to the next.”
With the forthcoming holiday season projected to be a busy and volatile period given the shortages in labor and the supply chain, tough challenges could be in store for many businesses, and failure among companies to improve their CX could see a major impact on their bottom lines, the study warned. “Consumer expectations are higher than ever this holiday season,” said Temkin. “That’s why it’s critical for businesses to focus on what they can control: relentlessly improving their customer experience. Retailers need to tap into customer insights to build up digital channels that deliver personalized experiences that seamlessly connect with their in-store offerings.”
Author Information
Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.
At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.
