Adverse Events Put $3.1 Trillion in Annual Consumer Spending Globally at Risk | So Good News
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50% of consumers reduced or reduced spending on a brand after a bad customer experience
PROVO, Utah & SEATTLE–( BUSINESS WIRE )– Bad customer experiences lead directly to lost revenue, as a bad experience can mean a loss of customer loyalty and the ability to spend money in the future.
A new study from Qualtrics (Nasdaq: XM) has found that globally, organizations are at risk of 6.7% of their revenue, or $3.1 trillion, when they lose customers due to problems.
The Qualtrics XM Institute analyzed data from the 2023 Global Consumer Study to determine the share of products at risk due to negative customer experience, from customers cutting back on spending or cutting back. These percentages were multiplied by household consumption figures from the World Bank to translate them into income.
Consumers are feeling the pinch of inflation and are looking for ways to boost their finances, even looking for a second job or moving to a cheaper city. Prices have increased by about 8% in the past year, 1 and considering how easy it is for consumers to switch brands, companies need to look at what they are doing to keep loyal customers.
On average, consumers report that they have a very negative experience with organizations 16% of the time. And after such a negative interaction, half may reduce their spending with the brand or stop spending with it altogether.
The figures are a slight change from last year, when customers returned to their pre-pandemic expectations but industries faced disruptions in communications and staff shortages. A year ago, 18% of consumers reported such pain, and 53% of consumers stopped or downgraded their money after a disagreement.
“Delivering on the kind of promises that keep customers coming back is critical to a business’s long-term success, and this study shows the impact it has when a customer misses the mark,” said Bruce Temkin, director of the Qualtrics XM Institute. . “In a tough economy, consumers are very careful about how they spend, and just one problem can be enough to lose them as a customer forever.”
The stress of the holiday season exacerbates the situation
Emotions often increase during the holiday season, which can strengthen loyalty with organizations that have a good income, but bring increased risk to those who leave unhappy customers.
Three of the top five industries that lose customer revenue after failing to meet expectations are directly linked to holiday shopping. Online retailers, retail stores and package delivery companies have reduced 56% of shoppers or stopped using after experiencing bad experiences.
Qualtrics, the leader and creator of the event management platform, is changing the way organizations manage and manage four key business events—customer, employee, product and brand. More than 16,750 organizations worldwide use Qualtrics to listen, understand and act on data (X-data™)—the beliefs, attitudes and intentions that tell you why things are happening, and what to do about them. The Qualtrics XM Platform™ is a platform that helps businesses attract customers who stay longer and make more purchases, engage employees with a positive culture, create innovative products that people love and create a brand that people love. For more information, please visit qualtrics.com.
About the XM Institute
Qualtrics XM Institute is the world’s largest resource for information professionals. Led by industry visionary Bruce Temkin, the XM Institute team examines how organizations work with their stakeholders, including suppliers, employees, customers and partners. The XM Institute also leads the XM Pros Network, a growing global community of more than 6,000 XM leaders who participate in an ongoing monthly calendar. The Institute maintains the XM Professionals Certification, the gold standard in the field. For the latest XM news or to learn more about the XM Institute, please visit xminstitute.com.
Check out the original version on businesswire.com: https://www.businesswire.com/news/home/20221125005060/en/
Lauren Braun, Qualtrics