'Lost sales' due to poor customer experiences could hit $1.4T in U.S.
Negative customer experiences have the potential to cost businesses big bucks in 2025.
That’s according to a new global consumer study from Qualtrics XM Institute, which reveals that across 23 countries, a total of $3.8 trillion of “sales at risk” due to bad experiences, including a high of $1.4 trillion in the United States. The global total is $199 billion higher than last year.
More than half (53%) of consumers say they will cut spending with a company after a bad customer experience, and admit that one-in-10 (12%) of their brand interactions don't live up to expectations. The industry sectors most at risk of cuts in spending after a bad experience are fast food brands (66%), department stores (65%), online retailers (64%), auto dealers (63%), mobile phone providers (59%) and parcel delivery services (56%). Consumers are least likely to stop doing business with supermarkets (7%) and public utilities (9%) after a bad experience.
Customers also report their biggest customer experience pain points are service delivery issues (selected in 46% of bad experiences), communication problems (45%) and employee interactions (39%). Price (37%), quality (35%) and after-sales support (21%) are less of an issue for global consumers, but remain red flags for brands, according to Qualtrics.
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"The holidays are a critical sales period and this year the stakes are higher than ever with cost of living pressures expected to impact sales,” said Isabelle Zdatny, customer loyalty expert at Qualtrics. “Customers want to be kept up to date on what's happening with their orders, know they can trust they're going to get the product and service they've been promised, and see value from their purchase - and they're rewarding brands that do it well.”
On a positive note for businesses, compared to its study from last year, Qualtrics is reporting that consumers are having fewer bad experiences. The percentage of consumers who report having a bad customer experience dropped by 1.2 points since last year. Poor experiences have decreased the most among electronics makers (-8 pts), auto dealers (-4 pts) and property insurers (-3 pts).
However, across the 20 industries surveyed over both years, the percentage of poor interactions after which consumers stopped or reduced spending has increased by 2.7 points. The largest increases come from consumers cutting spending with department stores (+14 pts), followed by streaming services (+12 pts) and online retailers (+11 pts).
