Three-quarters of customers would pay more for a premium experience

The majority of US consumers (72%) say they would pay more for a premium experience when doing business with a company, according to new data from Qualtrics XM Institute. In particular, consumers are most willing (84%) to pay for a better experience when flying. Meanwhile, 61% are willing to pay more when visiting a primary care provider, and 68% for better customer service.

Share of consumers willing to pay more for an upgraded experience

While business leaders face economic and supply chain uncertainty, the experience they offer to their customers is within their control. There is significant potential for companies that can delight their customers.

“Companies that deliver great experiences prioritize the human connection with customers,” says Isabelle Zdatny, head of thought leadership at XM Institute. “This is a critical time for CX leaders, with outsized rewards for those that get it right. During uncertain times, consumers gravitate toward brands they already know and trust, creating a huge opportunity for organizations to build even stronger connections with their customers.”

When it comes to splurging on an upgrade, not all consumers are equal. Men are more inclined to pay for premium options, with three-fourths (77%) willing to upgrade compared to two-thirds (67%) of women. Older consumers are less likely to pay for better experiences. The youngest cohort (18-24) shows the most enthusiasm for upgrades, willing to pay more even for slightly enhanced experiences.

According to Zdatny, “Younger consumers have grown up in a digital world where upgrading and customizing experiences is the norm. They also tend to prioritize memorable moments over material possessions. Consequently, brands have a huge opportunity to differentiate themselves by creating tailored premium experiences that appeal to this important demographic.”

Friction points predict customer sentiment

These findings are an important insight into how customers decide where to spend their money, especially as organizations navigate economic uncertainty, understand changing customer behaviors and identify where AI can drive business and customer outcomes. The XM Institute data identifies the key moments that can predict customer sentiment.

Simply getting help from customer service is one of the most frequently identified moments of frustration for customers. Bad customer service can be a deal-breaker; this experience is the biggest predictor of a customer’s likelihood to recommend a company.

“Today’s customers are connecting with organizations online, in person, over social media, and more,” says Zdatny. “From the customer perspective, each of these interactions carries the same expectations of the brand. But internally, each one is often managed by different teams within the organization that don’t share data and insights, leading to an inconsistent customer experience.”

On average across industries, two-thirds of customers say a recent customer experience they had could be improved. Along with getting help from customer service, product discovery, and receiving useful updates are frequent challenges customers face.

A closer look at banking customers highlights the difference it makes when people aren’t able to get customer service. The XM Institute study revealed a 44-point difference in NPS (Net Promoter Score) between customers who did have this problem and those that didn’t.

However, the most common moments that customers say need improving are not necessarily the biggest predictors of customer sentiment. For example, while airline customers are more likely to say claiming baggage and finding flights are the top elements that need improving, getting help from customer service and (understandably) flying to the destination are stronger predictors of their overall sentiment toward the airline.

“Looking at customer feedback in isolation gives you an incomplete view of what truly drives customer behavior and business results,” according to Zdatny. “Understanding the complete customer journey is essential because it reveals the true 'moments that matter' — not all journeys need improving, and not all improvements are worth the effort. By identifying these critical moments, organizations can focus their resources where they'll deliver the greatest return on their customer experience investments.”