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Firms lose US$4.7 trillion to bad experience: Most SEA consumers unhappy with CX

Firms lose US$4.7 trillion to bad experience: Most SEA consumers unhappy with CX

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Bad experiences are costing businesses some US$4.7 trillion in consumer spending every year globally, said Qualtrics's latest 2022 global consumer trends report. In fact, 9.5% of a brand’s revenue is at risk due to bad experiences. In fact, consumers are 3.5 times more likely to purchase from a business after a positive customer experience and are 5.1 times more likely to recommend an organisation after a positive customer experience. The global consumer trends report surveyed 23,000 consumers across 23 countries including Singapore, Malaysia, Indonesia, the Philippines, and Thailand.

In Singapore, nine in 10 of the 1,000 consumers surveyed were dissatisfied with their experiences as customers in 2021. Qualtrics found that 89% of people believe customer experiences need to be better. Customer service support was the second most common area consumers wanted businesses to improve, behind prices and fees.

Making information easier to find online, and communications were also called out for improvement. Meanwhile, two-thirds of respondents in Singapore said businesses need to care more about them (68%) and get better at listening to feedback (68%). 

Meanwhile, according to a separate study done by Qualtrics XM Institute titled "Global Study: What Happens After a Bad Experience", poor customer experience can cost businesses in Singapore a combined total of up to US$11 billion annually. This survey was based on data collected from 17,509 consumers across 18 countries including Malaysia and Indonesia. 

According to the study, 51% of consumers in Singapore cut their spending after a single bad experience with a company. In contrast, 69% of consumers said they would buy more from a company if it treated them better.

After a good customer experience, consumers are also 3.8 times more likely to purchase again, 4.8 times more likely to recommend a friend, and four times more likely to trust the brand.

Majority of Malaysian and Indonesian consumers also dissatisfied with CX

Like their Singapore counterparts, 94% of those in Malaysia said customer experience needs to be improved. In fact, 53% said they have cut spending after a single bad experience. This, according to Qualtrics, could be costing businesses a combined total of US$35 billion annually. 

Customer service support was the second most common area consumers wanted businesses to improve, behind prices and fees. Making products and services easier to use was also called out for improvement. Three-quarters of respondents in Malaysia said businesses need to care more about them (77%) and get better at listening to their feedback (78%). Also, 76% said they would buy more from a company if it treated them better

After a good customer experience, Qualtrics found that consumers are four times more likely to re-purchase, 3.6 times more likely to recommend, and 2.8 times more likely to trust a brand

The trend of dissatisfaction with customer experience is also evident in Indonesia, with 96% of Indonesian respondents reporting they were dissatisfied with their experiences as customers this year, costing local businesses up to US$59 billion annually.

Like Malaysian respondents, Indonesians also listed customer service support as the second most common area they wanted businesses to improve, behind prices and fees. Making products and services easier to use was also called out for improvement. Half of respondents said they have cut spending after a poor customer experience, while 75% of respondents said they would spend more with a company if they were treated better. Indonesian consumers are three times more likely to re-purchase, trust, and recommend a company after a positive customer experience. 

What do global consumers want when it comes to experience?

Similar to the majority of Singaporean consumers, eight out of 10 individuals surveyed globally believe customer experience needs to be improved. The biggest areas of improvement for companies were in prices and fees, customer service, product capabilities, and ease of use. Online resources and the buying process were also key areas where consumers wanted businesses to improve.

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To succeed in engaging consumers and improving their experience, Qualtrics said brands needs to ditch the one-size-fits-all approach to service and instead, deliver a tailored experience. They should also think about the customer and not the channel. From the buying process to how customers use your products and access support, brands need to think about how customer interaction has changed. They should also equip teams with tools and processes to get insights to the right people.

At the same time, 63% of consumers globally think businesses need to do a better job of listening to feedback, while 62% said businesses need to care more about them. Doing so will no doubt have a positive impact on consumers because 60% of those surveyed said they would buy more from brands if their needs are placed first.

As channel preferences evolve, brands’ listening tools should also. Brands should also make indirect feedback part of their strategy so they can understand what consumers are saying, wherever they are saying it, Qualtrics said. Tracking the ROI of experience is also important and Qualtrics said unstructured data will help brands detect emotion, effort, and intent. This should then be connected to a structured framework such as CSAT, CES, or NPS so brands can see their impact on performance.

In addition to tailoring and personalising experiences, brands should also work to turn data into insight by gathering solicited and unsolicited feedback from every channel. Identify friction points in the brand’s most valuable customer journeys, and use the warning signs and signals from customers as triggers to take action. Additionally, Qualtrics said brands should build new segmentation models based on experience data, rather than just demographics. By grouping customers by their expressed needs and preferences, brands can then develop targeted offerings that feel 1:1 and deliver them at scale.

Head of Qualtrics XM Institute, Bruce Temkin, said as consumers are actively looking to do more with companies that put their needs first, it is more important than ever for businesses to continually listen to and understand the needs of their customers. From there, they should then rapidly adapt to those signals. "Those that can make ongoing use of customer insights will differentiate themselves going forward," he said.

At the same time, Vicky Katsabaris, director of XM solutions strategy, Qualtrics, said customer experience will be in the spotlight as consumers will not only demand higher quality support and services in response to the higher costs they might be paying, they will actively seek out and reward those companies able to meet and exceed their expectations.

"It’s a reality that means businesses will have to rethink their customer experience programs to deepen relationships with customers, while also creating long-term, sustainable solutions that can address evolving challenges," she added.

Photo courtesy: 123RF 

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