Tighter budgets put spotlight on the importance of winning consumer loyalty
Consumers are increasingly seeking a human connection in their interactions with brands, according to Qualtrics (Nasdaq: XM) 2023 Global Consumer Trends Report. In fact, talking to a helpful, empathetic service agent matters more to customers than having a short wait time.
Qualtrics XM Institute surveyed more than 33,000 consumers across 29 countries to understand what is driving the current consumer mindset as the economy pushes people to make tough decisions on where and how they spend their money. Revenue is on the line as companies scramble to hold on to their customers and attract new ones; Qualtrics research shows that customers who rate their interaction as a five-star experience are more than twice as likely to buy more from a company as customers who had a one- or two-star experience.
“The human desire to be heard and understood is universal, especially in today’s digital world,” said Bruce Temkin, head of Qualtrics XM Institute. “With all of the economic, political, and medical uncertainties over the next couple of years, organizations need to get even better at recognizing and responding to shifts in what customers are thinking and feeling to retain their loyalty.”
The consumer trends that will shape 2023 are:
- Consumer loyalty will be won through personal connections, not pure efficiency
- Brand switching is likely to increase as consumer patience runs out
- Unstructured feedback will gain importance for understanding consumer’s changing needs
Consumer loyalty will be won through personal connections with organizations, more so than through operational efficiency.
In tough economic environments, hitting metrics can take on increased importance for companies to justify their budgets, but organizations can’t afford to lose sight of the overall customer experience by focusing solely on operational goals.
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In fact, treating consumers like humans carries more value than pure operational efficiency during customer interactions.
- A personable service agent has a bigger impact on consumer satisfaction than a short wait time.
- When a consumer talks to an empathetic agent, they are 5.2 times more likely to be happy with the overall experience than consumers who were not satisfied with how empathetic the agent was.
- By contrast, consumers with a short wait time were 2.7 times more likely to be happy with the overall interaction than those dissatisfied with their wait times.
Efficiency still has a very important place in the consumer experience, and there are tasks that people would rather do on their own instead of talking to a company representative. For example, 63% of people want to book airline tickets without talking to the airline. Organizations will need to understand what their customers want in a given situation to leave them with a positive experience.
Brand-switching likely to increase in 2023 as consumer patience runs out.
So far, consumers have been relatively forgiving of challenges brought on by staffing challenges, but that patience may run out as their own wallets feel the impact of the economy. During the Great Recession, 38% of consumers switched brands1, and it may take only a single negative interaction. As consumers think more carefully about their spending, companies who exceed expectations with how they listen, understand and act on customers’ needs can build long-term loyalty in a down market.
- More than half (55%) of consumers say they’ve had customer service issues go unresolved, and 36% are unhappy with the empathy they received from a customer service agent2.
- This is an opening for organizations to exceed expectations and win loyalty–when consumers had a five-star experience, they were three times more likely to both trust and recommend a company than if they had a bad experience.
Unstructured feedback will be increasingly essential to understanding and meeting consumer needs.
Nearly two-thirds (63%) of consumers say companies need to do a better job of listening to them – unchanged from last year, showing that there is still room for improvement. One way companies can improve their listening is by using context clues from chats or other qualitative responses to understanding a consumer’s specific situation and how to respond appropriately in real time. Looking at this type of feedback also identifies opportunities to introduce changes that benefit the entire consumer population.
Consumers are talking about brands on social media and in reviews, and companies can tap into this trove of feedback to better understand their customers and address their needs.
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