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Bad Experiences Put $3.1 Trillion in Annual Global Consumer Spending at Risk

50% of consumers decreased or entirely cut spending with a brand after a bad customer experience

Bad customer experiences lead directly to lost revenue, as a negative interaction can mean losing customer loyalty and the potential for additional spending in the future.

“Delivering on brand promises to keep customers coming back is essential for the long-term success of a business, and this research shows the actual impact on the bottom line when customer experience misses the mark.” -Bruce Temkin, Qualtrics XM Institute

New research from Qualtrics finds that globally, organizations risk 6.7% of their revenue, or $3.1 trillion, when they lose customers due to poor experiences.

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The Qualtrics XM Institute analyzed data from the 2023 Global Consumer Study to find the share of sales at risk due to bad customer experiences, from customers either lowering their spending or cutting it out entirely. These percentages were multiplied by household consumption numbers from The World Bank to translate them into monetary figures.

Consumers are feeling the pinch of inflation and looking for ways to bolster their financial standing, even looking for a second job or moving to a cheaper city. Prices are up nearly 8% over the past year,1 and considering how easy it is for consumers to switch to a different brand, companies must focus on the overall experience they’re creating to maintain loyal customers.

On average, consumers say they have very negative experiences with organizations 16% of the time. And after such a negative interaction, half either reduce their spending with that brand or stop spending with them altogether.

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These numbers are a slight improvement over last year, when customers returned to pre-pandemic expectations but industries faced supply chain disruptions and staffing shortages. A year ago, 18% of consumers reported such negative experiences, and 53% of consumers stopped or lowered their spending after a poor interaction.

“Delivering on brand promises to keep customers coming back is essential for the long-term success of a business, and this research shows the actual impact on the bottom line when customer experience misses the mark,” said Bruce Temkin, head of Qualtrics XM Institute. “In tighter economies, shoppers will be more careful about their spending, and a single negative experience could be enough to lose them as a customer forever.”

Holiday season stress amplifies the impact of experiences

Emotions are often heightened during the holidays, which can solidify loyalty with organizations that get it right, but bring extra risk to those that leave customers unhappy.

Three of the top five industries most likely to lose customer dollars after failing to meet expectations are directly connected with holiday shopping. Online retailers, department stores and parcel delivery companies have had at least 56% of consumers decrease or cease spending after a bad experience.

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