SDL today revealed the results from a new research study, examining how, why and when customer experience (CX) failures happen, the implications for brands and how they can win back a customer should a failure occur.
Based on a survey of 2,784 consumers across nine countries and three generations about their most major CX failure in the last ten years, the findings show that it doesn’t take much for a failure to take place. In fact, 24 per cent of “horrible” failures required less than an hour’s time and less than the cost of lunch to navigate – and in the U.S., this jumps to 32 per cent.
Once a customer experiences what they consider a major CX failure, the brand risks serious consequences. Specifically, 64 per cent will stop recommending the organisation, start looking for an alternative brand or actively disparage the company via word of mouth, social media or other online channels.
There are financial implications too, as 90 per cent of those experiencing a failure spend the same or less with the brand during the following year. The 10 per cent who spend more say they have no choice, being locked into a contract or have no other alternative. Additionally, during the year after a failure, brands will lose 65 percent of the revenue previously contributed from those customers who had experienced the failure.
“Consumers have high expectations for brands today and little patience for a break-down in experience,” said Paige O’Neill, CMO, SDL. “While the good is expected, the bad will go viral. Keeping this in mind, organisations must have an integrated strategy in place that caters to each individual consumer and empowers employees to meet customers’ needs.”
The research found that the top three steps brands can take to truly bring a customer back after a failure include: offer a genuine and personal apology, admit the failure and offer discounts/credits related to the failure.
Four of five blame people for CX failures
Twenty-one per cent of major CX failures happen before a customer even buys
Sixteen per cent of major CX failures happen during the shopping journey, or at the register
Younger generations are less willing to resolve a failure and will move on: 27 per cent of young millennials will not try to resolve the failure, as compared to 13 per cent of baby boomers
More than 40 per cent of consumers’ “worst CX experiences” have occurred in digital industries, including communications, electronics and online retail
Consumers are more likely to remember a negative experience over a positive: of those consumers that can recall a major negative customer experience that occurred in the past ten years, only 55 per cent can recall a major positive customer experience occurring in the same timeframe.