Businesses in India are risking 17.3 pc of their revenue due to poor customer experiences – putting US$325 Billion in consumer spending at risk in the country, according to new research from Qualtrics XM Institute.
Based on analysis of data from the Qualtrics 2023 Global Consumer Trends report, which includes insights from more than 1,100 respondents in India, consumers say they have very poor customer experiences 48 pc of the time – a 14-point increase on 12 months previously (34 pc). After receiving a poor customer experience, more than a third (36 pc) say they reduce their spending with that brand or stop spending with them altogether.
After another year of change and disruption for consumers, the study – conducted in August and September 2022 – revealed banks (60 pc), airlines (57 pc), and credit card providers (56 pc) have the highest percentage of consumers who recently had a “very poor” experience. In contrast, supermarkets (32 pc), public utilities (37 pc), and hospitals / medical providers (37 pc) have the lowest percentage of consumers who recently had a “very poor” customer experience.
“Delivering on brand promises to keep customers coming back is essential for the long-term success of a business, and this research shows the actual impact on the bottom line when customer experience misses the mark. In tighter economies, shoppers will be more careful about their spending, and a single negative experience could be enough to lose them as a customer forever,” said Bruce Temkin, Head of Qualtrics XM Institute.
“There has been a significant increase in the revenue at risk in India due to poor customer experiences compared to last year, along with a rise in how often consumers say they receive poor service. No organisation can afford customer churn, which is why addressing this widening gap by deeply tuning into the needs of customers must be a top priority in 2023 – and those that get it right stand to make market gains,” said Vicky Katsabaris, Director of XM Solutions and Strategy, Qualtrics.
The CX Trends organisations must prioritise in 2023
The Qualtrics 2023 Global Consumer Trends report pinpoints key trends organisations must prioritise in 2023 to ensure customer expectations are met:
- Customer loyalty will be won through personal connections more so than through operational efficiency
A personable service agent has a bigger impact on consumer satisfaction than a short wait time during customer interactions across Asia Pacific and Japan. For example, when a consumer from the region talks to an empathetic agent, they are 4.2 times more likely to be happy with the overall experience than consumers who are not satisfied with how empathetic the agent is. In contrast, consumers with a short wait time are 2.4 times more likely to be happy with the overall interaction than those dissatisfied with wait times.
Efficiency still has a very important place in the customer experience, and there are tasks where people would rather self-serve than speak to a representative. Organisations will need to understand what their customers want in a given situation to leave them with a positive experience.
- Brand switching likely to increase in 2023 unless organisations take action to exceed customer expectations
As consumers think more carefully about their spending, companies that exceed expectations with how they listen, understand, and act on customers’ needs can build long-term loyalty. With a third (33 pc) of consumers in India saying they’ve had customer service issues go unresolved, and 16 pc not satisfied with the empathy they received from a customer service agent, there is a significant opportunity for organisations to exceed expectations and win loyalty. When consumers have a five-star experience, they are 1.6 times more likely to trust and recommend the company, compared to those receiving a poor experience.
- Unstructured feedback will be increasingly essential to understanding and meeting consumer needs
A majority (85 pc) of consumers in India say companies need to do a better job of listening to their feedback, which is a 13-point increase on last year (72 pc). At a time when consumers are talking about brands on social media and in reviews, one way companies can improve their listening is by using insights from chats and other qualitative responses to understand a consumer’s specific situation and how to respond appropriately in real time.
View the report here.
