Bank and Hotel Loyalty Strongly Influenced by Customer Experience
Among industries, a great customer experience at a hotel leads to outsized loyalty, and a bad experience at a bank is most likely to cause customer churn
New research highlights the importance of frontline customer service experiences to driving loyalty
Last updated: June 15, 2023
PROVO, Utah & SEATTLE, June 15, 2023 – Electronics makers, hotels and airlines are most likely to drive positive business results through great customer experiences, according to new research from the XM Institute at Qualtrics (Nasdaq: XM). On the flip side, poor customer service is especially costly for banks and credit card companies.
Recent research from XM Institute looked at which industries have the most to lose and the most to gain from good or bad customer experiences, examining how interactions affect customers’ likelihood to purchase more from a company, recommend it, and trust it. Customer loyalty is built on any and every interaction someone has with a brand, such as customer service calls, sales floors and check-in desks.
Supermarkets are the most resilient industry, which may be influenced by additional factors like convenience and prices.
According to the XM Institute, 50% of consumers said they either decreased or stopped spending entirely with a company after a negative interaction, meaning bad experiences put 8% of companies’ annual revenue at risk. Consumers are slightly less likely to turn away than they were in 2021 when 53% of people said they’d cut spending after a bad experience, but in an uncertain economy, customer retention is even more important.
“Customers have more options than ever before, making the effect of a great experience critical for building a loyal customer base,” said Bruce Temkin, head of XM Institute at Qualtrics. “This goodwill extends beyond a single customer, as the happiest customers are also much more likely to recommend a company to others.”
Friction Trying to Reach Customer Service Turns Customers Away
If a customer says anything went wrong in their interaction, US consumers are significantly less likely to give a company more business than if everything went smoothly.
When customers do run into a problem, they want a quick and complete resolution, but a common challenge in the US was getting help from the customer service department. In many industries, trouble reaching customer service was the biggest friction point keeping a customer from repeat business.
Frontline employees who interact directly with customers play a crucial role in developing loyal customers, especially when they are trying to resolve an issue. More than 60% of people who did not have trouble getting help from customer service said they’d use the same bank again, compared with only 25% of people who struggled getting help.
“There are so many moving pieces to the overall customer experience, it’s incredibly valuable for companies to understand which journeys drive the most business impact,” said Temkin. “Not all customer journeys can be perfectly smooth, but focusing on the most important friction points goes a long way to ensuring repeat customers.”
About XM Institute
Qualtrics XM Institute is the world’s premier resource for experience management professionals. Led by industry visionary Bruce Temkin, XM Institute’s faculty researches trends and emerging practices in how organizations interact with their key stakeholders, including suppliers, employees, customers and partners. XM Institute also leads XM Pros Network, a thriving global community of more than 6,000 XM leaders who participate in an ongoing calendar of monthly events. The Institute maintains the XM Professionals Certification, the gold standard credential in the field. To access the latest XM content or for more information about XM Institute, please visit xminstitute.com.
Qualtrics, the leader and creator of the experience management category, is a cloud-native software provider that helps organizations quickly identify and resolve points of friction across all digital and human touchpoints in their business – so they can retain their best customers and employees, protect their revenue, and drive profitability. More than 18,750 organizations around the world use Qualtrics’s advanced AI to listen, understand, and take action. Qualtrics uses its vast universe of experience data to form the largest database of human sentiment in the world. Qualtrics is co-headquartered in Provo, Utah and Seattle, and operates out of 28 offices globally. To learn more, please visit qualtrics.com.