Poor Customer Service Threatens $4.7 Trillion in Annual Revenue Globally as Companies Struggle to Retain Staff

Rhea-AI Summary

The 2022 Global Consumer Trends report from Qualtrics highlights significant dissatisfaction among consumers regarding customer experiences. Based on feedback from over 23,000 consumers across 23 countries, 80% identified a need for improvement in customer service, which they cited as a primary reason for potential spending cuts. The report notes that companies risk losing $4.7 trillion in consumer spending due to poor service and emphasizes the importance of addressing customer feedback. The ongoing labor market challenges further complicate businesses' efforts to enhance customer experiences.

Positive

• Customer experience ratings showed recovery in 2021 after pandemic-related declines.
• 60% of consumers indicated they would increase purchases from companies that treat them better.

Negative

• 80% of consumers reported dissatisfaction with customer experiences.
• 53% would cut spending after a single bad experience, risking $4.7 trillion in consumer spending due to inadequate customer service.
• Current labor market challenges hinder companies' ability to enhance customer experiences.

80% of customers say they have had poor customer experience and 43% said customer service support must be improved

PROVO, Utah & SEATTLE--(BUSINESS WIRE)-- Nearly all consumers say they were dissatisfied with their experiences as customers in 2021, according to the 2022 Global Consumer Trends report from Qualtrics (Nasdaq: XM), the leader and creator of the Experience Management (XM) category.

The study, which collected input from over 23,000 consumers across 23 countries about their experiences with companies in 2021, found that 80% of people believe customer experiences need to be improved. Poor customer service is the second most common reason people said they would cut spending (prices and fees were number one).

The 2022 Global Consumer Trends report comes as the pandemic continues to impact operations around the world, and makes clear that consumers are missing a personalized, human element in their relationship with businesses. 62% of global consumers said businesses need to care more about them and 63% of consumers said companies need to get better at listening to their feedback.

The economic risk associated with delivering poor customer experiences are heightened by the fact that companies are desperate to fill frontline jobs in customer service and hospitality, leading in some cases to “skimpflation” – when companies are forced to cut back on services, hours, or quality. While the unemployment rate dropped across key industries according to the U.S. Bureau of Labor Statistics October jobs report, the labor force participation rate is still 1.7 percentage points below pre-pandemic levels. That represents just under 3 million fewer Americans considered part of the workforce and is reflective of ongoing concerns about staffing levels.

Prices also continue to climb. The Consumer Price Index for October 2021 rose 6.2 percent, the largest annual increase in about 30 years, meaning businesses will need to address customer service gaps and provide stellar customer experiences to make up for rising cost of goods.

“As people’s expectations have changed, companies haven’t kept up, perhaps waiting for the world to revert back to ‘the old way’. Well that’s not going to happen,” said Bruce Temkin, Head of the Qualtrics XM Institute. “As customers flocked to digital over the past 18 months, companies have made some initial changes but have failed to consistently respond, leading to fragmented and frustrating customer journeys and support as they switch from one channel to the next.”

9.5% of revenue is at risk due to bad experiences

This massive churn in the labor market creates a new challenge for businesses aiming to improve their customer experience ahead of the busy holiday season, and it could have a major impact on bottom lines. A recent Qualtrics XM Institute study in the US found that more than half (53%) of consumers have cut spending after a single bad experience with a company and businesses globally stand to lose $4.7 trillion in consumer spending due to poor customer experiences. 60% of consumers say they would buy more from a company if it treated them better.

“Customer experience ratings and the likelihood of customers to recommend a product or service to a friend saw a comeback in 2021 after dramatic drops during the early days of the pandemic in 2020,” said Temkin. “Continued changes in 2022, including macro-economic pressures, supply chain problems, and a labor shortage threaten to deal a wallop to vulnerable companies as customers switch providers in a quest to find better service.”

Read the full 2022 Global Consumer Trends report to learn more, including how businesses can create better experiences for their customers moving forward.

About Qualtrics

Qualtrics, the leader and creator of the Experience Management (XM) category, is changing the way organizations manage and improve the four core experiences of business—customer, employee, product and brand. Over 13,500 organizations around the world use Qualtrics to listen, understand and take action on experience data (X-data™)—the beliefs, emotions and intentions that tell you why things are happening, and what to do about it. The Qualtrics XM Platform™ is a system of action that helps businesses attract customers who stay longer and buy more, engage employees who build a positive culture, develop breakthrough products people love and build a brand people are passionate about. To learn more, please visit qualtrics.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211115005083/en/

Tyler Petersen, press@qualtrics.com

Source: Qualtrics

FAQ

What does the 2022 Global Consumer Trends report from Qualtrics indicate about customer satisfaction?

The report reveals that 80% of consumers are dissatisfied with their customer experiences and believe improvement is necessary.

How much revenue is at risk for companies due to poor customer experiences according to Qualtrics?

$4.7 trillion in consumer spending is at risk due to inadequate customer service experiences.

What percentage of consumers would increase their spending if treated better by companies?

60% of consumers stated they would buy more from companies that provide better treatment.

How has the labor market affected customer service according to the report?

Labor market challenges hinder businesses' ability to improve customer service, affecting customer experiences.