News

Study highlights much-discussed, oft-discounted importance of customer experience

June 21, 2018

A survey of 8,000 adults in France, Germany, the U.K. and the U.S. indicated that more than three-quarters (77 percent) of consumers have chosen a product or service from a company because of good experiences they had with it.

Conversely, 64 percent have avoided a brand because of a bad experience within the past year.

These findings, from a Customer Experience Tipping Point study commissioned by Medallia Inc., provider of customer experience management tools, and performed by Ipsos, an independent research firm, highlight the much-discussed but often-disregarded importance of customer experience on brand loyalty. 

Particularly, in the U.S., the survey found a troublesome coupling of high customer expectations for a positive experience with evidence of declining brand loyalty — particularly among younger groups of consumers.

Americans reported higher expectations than Europeans for a personalized experience, real-time response, and ability to chat with a live agent. 

The study also revealed that:

• 46 percent of U.S. mobile network customers are likely to switch brands after one bad experience.
• 56 percent of online shoppers and 49 percent of offline shoppers expect consistent levels of service across physical and digital channels.
• 70 percent of respondents expect an immediate response when they submit a complaint. If they think they worked harder than the company to resolve an issue, they are twice as likely to tell others, and four times more likely to stop purchasing from the company or use it less frequently.
• 30 percent of customers expect call center agents to be instantly familiar with their contact history; 40 percent expect to be offered personalized experiences based on their interests, buying behavior, demographics and psychographics.
• Although the 55-plus age group is the fastest growing adult demographic in the US, this group was least likely to report that their customer expectations had been exceeded within the past year.
• 66 percent of women (compared with 62 percent of men) have avoided a brand because of a bad experience. Among millennials and Gen Z, brand avoidance due to a bad experience was 70 percent and 68 percent, respectively.

"[C]onsumers know they have options," Medallia Solution Principal Rachel Lane said. "For companies looking to create a competitive edge, having a strong brand recognition, or even stellar product isn't enough. Customer experience is the tipping point, and without a strong plan to create and maintain a positive experience, businesses will lose out."

The online survey polled a representative sampling of consumers from four countries: France (2,000); Germany (2,000); U.K. (2,000); and U.S. (2,002). Questions covered six industry sectors: online retail; offline retail; banking; insurance; mobile service providers; and hotels.

Read the complete study.