Businesses risk losing up to $3.8 billion in lost sales this holiday season because of bad customer experience, according to new research released today by Qualtrics. Annually this rises to $71 billion in Australia and a staggering $5.8 trillion globally.
As organisations work hard to win customers’ loyalty and hard-earned dollars in this peak holiday period, 54% of consumers in Australia say they will cut spending after receiving a bad customer experience, and admit that 1 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%).
Consumers in Australia 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 for brands.
“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,” said Ivana Sekanic, Customer Experience Strategist, Qualtrics.
Frontline workers under strain
Compounding the bad customer experience risks for organisations are the findings that frontline employees – such as retail workers and restaurant servers – 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. Globally, these trends are particularly prevalent in physical retail stores and table service restaurants.
Five ways to deliver a great customer and employee experience this holiday season
- 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.
- 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.
- 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. Carefully consider how your brand promise forms customer expectations.
- 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, allowing them to seize opportunities swiftly.
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.