Businesses risk losing up to $3.8 billion in lost sales this holiday season because of bad customer experience, according to new research by Qualtrics. Annually, this rises to $71 billion in Australia and a staggering $5.8 trillion globally.
Over half (54%) of Australian consumers say they will cut spending after receiving a bad customer experience and admit that one in 10 of their brand interactions don’t live up to expectations. Globally, 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%), and parcel delivery services (56%).
Australian consumers also report their biggest customer experience pain points are communication problems (46%), followed by service delivery issues (44%), and pricing concerns (39%). Product quality (35%), employee interactions (35%) and after-sales support (16%) are less of an issue but remain red flags.
Qualtrics customer experience strategist, Ivana Sekanic said, “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. Customers want to be kept up to date on what’s happening with their orders, know brands recognise and understand what they need, and that they can trust they’re going to get the product and service they’ve been promised – and they’re rewarding brands that do it well.”
Compounding the bad customer experience risks for organisations are the findings that frontline employees often report lower levels of engagement, intent to stay, and inclusion. Frontline workers are also less likely to say their expectations at work are met, or that they are paid fairly.
Qualtrics workplace behavioural scientist, Dr. Cecelia Herbert said, “Frontline employees have the most direct influence on customer experiences, yet these are the people who report the lowest levels of engagement and morale at work. If businesses are depending on strong holiday trading, they must start with employees. Simple fixes that improve their experiences at work can have exponential benefits – cultivating an engaged, high-performing team translates to satisfied, loyal customers who spend more.”
Qualtrics recommends five ways to deliver a great customer and employee experience:
- Ease the pressure on frontline employees
Making it easier for frontline employees to meet customer needs is a key factor in exceptional customer experiences. Whether on the shop floor, in call centres, or managing digital chats, they face significant challenges while working to create positive experiences. By streamlining processes, improving communication, and investing in training, organisations can empower these teams and enhance overall customer satisfaction.
2. Communicate clearly and often to reduce confusion
Customers prefer brands that keep them informed at every stage, from product availability to purchase, delivery, and after-sales support. It’s crucial for organisations to provide the right information at the right time to ensure customer satisfaction and trust, while simultaneously reducing call volumes.
3. Make it simple and easy for customers by keeping your promises
The holidays can be stressful, and customers want assurance they will receive the products and services as promised. For example, if next-day delivery is advertised, the brand must fulfil this expectation to maintain trust and prevent added stress and uncertainty for the customer.
4. Stay responsive to customer needs
Customer needs, expectations, preferences and behaviours are constantly changing. Brands must stay ahead of these changes by using customer insights captured from surveys, online reviews, call centres, social media, and more. This enables organisations to identify trends and unmet needs.
5. Exceed expectations where it counts
Leading brands focus on prioritising key moments to exceed expectations for customers and employees in the moments that matter to them, ensuring trust in the information provided, faster interaction completion, and for it to be a seamless experience. For instance, as more customer interactions are complete via digital channels it’s likely to raise the stakes and importance for person-to-person engagements.