Poor Customer Experiences Put $1.9 Trillion in Consumer Spending at Risk Annually, New Qualtrics XMI Study Finds

More than half (53%) of consumers have cut spending after a bad experience with a company; Internet service providers, airlines most likely to frustrate customers with poor service

New research from Qualtrics found that U.S. businesses risk losing $1.9 trillion in consumer spending due to poor service experiences. Approximately one in five consumers say they have a bad interaction with an organization every 90 days, with internet services and airlines among the most likely to deliver poor customer experiences, according to a new study by Qualtrics XM Institute.

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“Consumer expectations are higher than ever this holiday season. With all the ways the pandemic is affecting retailers, we may see shoppers running into frustrating situations, including items being out of stock and fewer employees available to help them find what they need”

These findings come at a time when businesses are facing COVID-related supply chain delays and staffing shortages as the holiday shopping season approaches. Consumers can switch loyalties with the click of a button, and they still expect businesses to deliver on promises, not just regarding their products but for quality customer service as well. Ahead of seasonal sales and large shopping events, like Black Friday, the results underscore the importance of customer service, as more than half (53%) of consumers have cut spending after a recent bad experience.

Ongoing health concerns may prompt customers to shop online this year, and the new global study shows that online retailers are more likely than department stores to deliver poor customer experiences, which could include late delivery, cumbersome return policies, representatives who lack the knowledge to solve customer problems or a confusing app or website. As a result, department stores have a higher customer trust and loyalty rating and less revenue at risk — 6.5% compared to online retailers’ 13%.

Overall, government agencies, internet service providers, mobile phone providers and airlines are the industries most likely to deliver poor customer experiences and are among the least trusted by consumers. On the other hand, consumers of the pandemic era are least likely to report a bad experience with supermarkets, streaming media services, department stores and fast food restaurants. Supermarkets have the lowest sales at risk due to poor experience at 4.7% of revenue.

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“Consumer expectations are higher than ever this holiday season. With all the ways the pandemic is affecting retailers, we may see shoppers running into frustrating situations, including items being out of stock and fewer employees available to help them find what they need,” said Bruce Temkin, Head of Qualtrics XM Institute. “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.”

In the table provided below, highest and lowest numbers are bolded.

Industry

% of Revenue
at Risk Due to
Poor Customer
Experiences

% of Customers
Who Reported a
Recent Bad
Experience

% of Customers
Who Recently
Cut/Decreased
Spending After a
Bad Experience

Qualtrics
Consumer
Trust/Loyalty
Index

Internet Service Providers

14.7%

27%

54%

67%

Government Agencies

14.2%

30%

47%

61%

Mobile Phone Provider

14%

23%

60%

67%

Airline

13.7%

27%

50%

75%

Online Retailer

13%

20%

63%

75%

Credit Card Provider

11.5%

20%

56%

69%

Parcel Delivery

10.5%

18%

57%

73%

College/University

9.2%

20%

45%

71%

Health Insurance

9%

19%

48%

71%

Fast Food

8.7%

15%

57%

76%

Bank

8.6%

16%

54%

71%

Hospital/Medical Clinic

8.2%

16%

51%

73%

Department Store

6.5%

12%

54%

77%

Streaming

4.8%

11%

42%

77%

Supermarket

4.7%

10%

47%

78%

Methodology

This data comes from Qualtrics XM Institute Global Consumer Study, which evaluated 17,509 consumers across 18 countries, including the United States, Australia, Brazil, Canada, France, Germany, Hong Kong, India, Indonesia, Japan, Malaysia, Mexico, Philippines, Singapore, South Korea, Spain, Thailand and the United Kingdom. To ensure the data is reflective of populations, quotas were set for responses to match the age, gender and income demographics of each country. The $1.9 trillion U.S. number is an estimate based on study findings and global household consumption numbers from the World Bank.

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