ROI of

customer
experience
in 2021
How breakthrough customer
experiences are driving
loyalty and growth

© 2021 Qualtrics LLC

1
 Table of 3 Summary

contents 9 How customer experience impacts trust

14 How customer experience impacts advocacy

18 How customer experience impacts likelihood to purchase more

23 Maximizing CX ROI

2
 SUMMARY

It’s official: experience drives

loyalty and growth

3
 Summary The better the experience, the stronger the loyalty

It’s clear from our research that a good, or very good, customer experience can increase
loyalty, improve sales and revenue, and differentiate a brand from its competitors.

Brands that overlook the importance of customer experience also underestimate the
damage bad customer experience can cause. Our research found that just one bad
experience can have a negative impact on customer relationships and reduce future
sales by up to 14.7%.

CONSUMERS ARE:

4.3x 5.1x 3.5x

more likely more likely to more likely
to trust an recommend an to purchase
organization organization more from an
after a positive after a positive organization
customer customer after a positive
experience experience customer
experience

4
 Overall, we found a strong connection between good customer experience and loyalty.

Based on customer satisfaction ratings (1-5 stars), it’s clear that the better the customer
experience, the more likely customers are to trust, advocate and purchase more.

CUSTOMER EXPERIENCE

A global view
In partnership with the Qualtrics XM Institute, we surveyed 17,509
consumers across 18 countries, exploring customer experiences across 17
industries. We investigated how satisfaction with an experience impacted
three loyalty metrics – trust, advocacy and likelihood to purchase more. We
analyzed the effect of poor, okay, good and very good CX to determine the
upside of a positive experience on businesses, and the dangers posed by
providing poor experiences.

Read on to dig deeper into these three loyalty metrics, how they vary by industry and how
your brand can leverage great customer experiences to drive sales and growth.

5
 It takes just one bad experience to impact revenue

Just as it’s clear that good customer experiences have enormous upside for businesses,
there are also threats to be wary of that come with a bad experience.

Businesses that stand still will suffer

Our research shows that just one bad experience is enough to have a negative
impact on revenue.

9.5%
On average, organizations across all
17 industries risk losing 9.5% of their
revenue due to bad experiences.

Every industry is at risk

The repercussions of bad experiences can be seen across every industry we surveyed.
On average, across all 18 countries and 17 industries, 18% of consumers reported
having a very poor experience recently with an organization in one of the industries
we asked about.

6
 Poor customer experiences impact the bottom line

Businesses risk losing on average 9.5% of their revenue, and up to 14.7% of their
revenue in some cases, by providing a poor customer experience. No matter the
service or product provided, all industries stand to lose when consumers aren’t
satisfied with their experiences.

Highly competitive, easy-to-switch industries are most at risk

Whether it be internet service and mobile phone providers, fast food or online retailers,
it’s never been easier to switch. Consumers that have a negative experience within
these industries are much more likely to decrease buying, or stop altogether. After all,
they can just go elsewhere.

7
 Internet Service Provider 14.7%

Government Agency* 14.2%

Mobile Phone Provider 14.0%

Airline 13.7%
INDUSTRY SNAPSHOT
Online Retailer 13.0%

How bad experiences impact

Credit Cardsales
Provider 11.5%

Property Insurance 11.0%

(Percentage of consumers reporting a very poor experience) x
Parcel Delivery 10.5%
(Percentage of consumers that decreased and stopped spending after a bad experience)
College / University 9.2%

Internet Service Provider 14.7% Health Insurance 9.0%

Government Agency* 14.2% Fast Food 8.7%

Mobile Phone Provider 14.0% Bank 8.6%

Airline 13.7% Hospital / Medical Clinic 8.2%

Online Retailer 13.0% Public Utility* 7.2%

Credit Card Provider 11.5% Department Store 6.5%

Property Insurance 11.0% Streaming Service 4.8%

Parcel Delivery 10.5% Supermarket 4.7%

College / University 9.2% Overall 9.5%

Health Insurance 9.0%

Fast Food 8.7%

Bank 8.6%

Hospital / Medical Clinic 8.2%

* Although Government Agencies and Public Utilities may not have revenue at risk due to bad experiences,
Public Utility* there are likely latent loyalty issues that could manifest in other areas.
7.2%

Department Store 6.5%

8

Streaming Service 4.8%

SECTION 1

How customer
experience impacts trust
 How customer Invest in building trust — the payoff is worth it

experience The more satisfied your consumers are, the more trust they place in you. We found that

impacts trust 89% of consumers were likely to trust an organization after a very good experience,
meaning it’s vital to provide excellent CX to win customers over.

THE IMPACT OF CX ON LIKELYHOOD TO TRUST

There’s a POOR CX OKAY CX GOOD CX VERY GOOD CX

69-point gap
between the
likelihood to 89%
trust after a very 81%
good experience
(5 star) versus a
poor experience
(1-2 star).”
50%

21%

10
 TRUST: INDUSTRY VIEW

Airline customers are the most forgiving Airlines have the highest trust
ratings of consumers who didn’t have a good experience (30%). Given that 27%
of consumers we surveyed had a very poor recent experience with airlines – the
second highest industry result – airlines seem able to weather poor experiences
better than most.

Satisfying experiences in healthcare lead to the highest levels of trust

Hospitals and medical clinics have the highest trust rating when customers
have good experiences with them (87%) or a very good experience (92%).
Only 16% of consumers reported a poor recent experience in this sector,
the 6th lowest of 17 industries.

11
 Mobile phone providers are at highest risk of losing customer trust
Only 15% of consumers are likely to trust mobile providers when they have a bad
experience. With 23% of consumers having a recent negative experience – the
fourth highest industry rate of very poor experiences – it’s clear that mobile phone
providers have their work cut out for them to build trust.

Education providers may have to work the hardest to win trust

Colleges and universities are the least likely of all the industries to create trust
after a highly satisfying experience, meaning educational providers might need
to consistently exceed expectations. Of the consumers we surveyed, 20%
reported a negative recent experience, showing that there’s some work to do
to gain and maintain loyalty.

12
 Percentage of customers ‘somewhat likely’ or ‘very likely’ Lowest Trust Rate
to trust based on satisfaction rating Highest Trust Rate

Poor CX Okay CX Good CX Very Good CX

Airline 30% 50% 81% 88%

Bank 22% 52% 81% 91%

College / University 22% 56% 82% 84%

Credit Card Provider 18% 46% 79% 90%

Department Store 29% 52% 83% 91%

Fast Food 24% 48% 79% 90%

Government Agency 19% 48% 83% 89%

Health Insurance 18% 48% 83% 89%

Hospital / Medical Clinic 29% 54% 87% 92%

Internet Service Provider 16% 50% 78% 89%

Mobile Phone Provider 15% 47% 78% 88%

Online Retailer 19% 43% 78% 88%

Parcel Delivery 15% 47% 80% 91%

Property Insurance 21% 48% 80% 88%

Public Utility 21% 54% 81% 90%

Streaming Service 21% 48% 78% 88%

Supermarket 30% 54% 83% 91%

Average 21% 50% 81% 89%

13
SECTION 2

How customer experience

impacts advocacy
 How customer Advocacy will be built or lost on the experience

experience Of all the loyalty factors measured, advocacy is the most strongly correlated to customer

impacts satisfaction (.55). The more satisfied consumers are with their experience, the more

advocacy likely they are to recommend your services or products to others. We found that 88% of
consumers were likely to recommend an organization after a very good experience.

IMPACT OF CX ON LIKELIHOOD TO RECOMMEND

There is a POOR CX OKAY CX GOOD CX VERY GOOD CX

71-point gap
between the
likelihood to 88%
recommend 77%
after a very good
experience
(5 star) versus a
poor experience 44%
(1-2 star).”

17%
15
 ADVOCACY: INDUSTRY VIEW

Airline customers will still recommend, even after an okay experience

Of all the industries, consumers are most likely to recommend airlines if they
have an okay or good experience with them (52% and 81% respectively).
As with trust, airline customers are much more forgiving than in other industries
after an okay experience.

Great customer experiences in department stores lead to the highest

recommendation rates Consumers who have very good experiences in
department stores are the most likely to recommend of all the industries we
examined. Of consumers we surveyed, only 12% reported a negative recent
experience with department stores (the third lowest of 17 industries), indicating
that this industry is consistently meeting customer expectations.

Parcel delivery services are the most at risk after a poor experience
When consumers have a poor customer experience, they are the least likely
to recommend parcel delivery services. In contrast, consumers who have a
negative experience with fast food restaurants are still twice as likely (26%)
to recommend it.

16
 Percentage of customers ‘somewhat likely’ or ‘very likely’ Lowest Recommend Rate
to recommend based on satisfaction rating Highest Recommend Rate

Poor CX Okay CX Good CX Very Good CX

Airline 25% 52% 81% 88%

Bank 14% 41% 74% 87%

College / University 20% 48% 74% 84%

Credit Card Provider 15% 38% 74% 87%

Department Store 24% 51% 80% 91%

Fast Food 26% 47% 80% 90%

Government Agency 14% 41% 75% 86%

Health Insurance 17% 41% 78% 89%

Hospital / Medical Clinic 24% 42% 75% 88%

Internet Service Provider 15% 44% 76% 87%

Mobile Phone Provider 14% 43% 76% 88%

Online Retailer 17% 45% 78% 89%

Parcel Delivery 13% 39% 75% 88%

Property Insurance 19% 49% 78% 86%

Public Utility 17% 43% 73% 85%

Streaming Service 19% 50% 79% 90%

Supermarket 23% 47% 79% 89%

Average 17% 44% 77% 88%

17
 SECTION 3

How customer experience impacts

likelihood to purchase more

18
 How customer Maximize the top line by doubling down on CX

experience When customers have had a good experience, they’re more likely to purchase more from

impacts that business in the future. In fact, we found that 85% of consumers were likely to purchase

likelihood to more after a very good experience.

3.5X
purchase more Consumers are 3.5x as likely to purchase
more after a 5-star satisfactory experience
than a 1- or 2-star experience.

When compared to trust and advocacy, CX seemingly has a lesser impact on likelihood
to purchase more. Businesses might think that this means they’ll be forgiven for a poor
experience and customers will return, but they would be wise to rethink that. Our research
shows that businesses risk losing on average 9.5% of their total sales, as more than half
of customers say they’re likely to decrease or stop spending with a brand after a bad
experience. Brands cannot afford to get complacent.

19
 IMPACT OF CX ON LIKELIHOOD TO PURCHASE MORE

There is a POOR CX OKAY CX GOOD CX VERY GOOD CX

61-point gap
between the
likelihood to 85%
purchase more 79%
after a very good
experience (5
star) versus a poor
experience
50%
(1-2 star).”

24%

20
 PURCHASE MORE: INDUSTRY VIEW

Supermarkets are most likely to see repeat purchases after an

okay experience Customers are most likely to purchase more from businesses
in this industry even after poor (34%), okay (61%) or good experiences (83%).
Additionally, supermarkets stand to risk losing the least number of sales (4.7%)
after a bad experience, with the lowest percentage of consumers reporting a
poor recent experience (10%).

Government agencies risk latent loyalty issues with mediocre experiences

Government agencies have the lowest percentage of consumers who would
return for another purchase after okay or good experiences (39% and 73%
respectively). Although government agencies may not have revenue at risk due
to poor experiences in practice, there are likely latent loyalty issues that could
manifest in other areas.

Credit card providers have the most to lose from poor CX Consumers are
least likely to return to credit card providers (17%) after a poor experience, with
20% of consumers reporting a recent experience that was negative. We found
that 11.5% of credit card providers’ sales are at risk after a bad experience – with
customers seemingly more likely to cancel their card or switch provider.

21
 Percentage of customers ‘somewhat likely’ or ‘very likely’ Lowest Purchase More Rate
to purchase more based on satisfaction rating Highest Purchase More Rate

Poor CX Okay CX Good CX Very Good CX

Airline 29% 54% 79% 88%

Bank 21% 46% 77% 82%

College / University 30% 44% 74% 83%

Credit Card Provider 17% 45% 75% 84%

Department Store 32% 55% 83% 88%

Fast Food 33% 56% 83% 89%

Government Agency 19% 39% 73% 82%

Health Insurance 25% 43% 74% 83%

Hospital / Medical Clinic 26% 43% 73% 80%

Internet Service Provider 20% 50% 78% 87%

Mobile Phone Provider 18% 48% 76% 84%

Online Retailer 25% 52% 83% 87%

Parcel Delivery 24% 48% 79% 86%

Property Insurance 19% 43% 76% 83%

Public Utility 33% 53% 75% 82%

Streaming Service 19% 50% 77% 87%

Supermarket 34% 61% 83% 88%

Average 24% 50% 79% 85%

22
 SECTION 4

Maximizing
CX ROI

23
 Maximizing Where should you focus for maximum return on your customer experience?

CX ROI + Invest in the experience to grow your customer base Customer experience –
good and bad, has the greatest impact on advocacy. As previously mentioned,
the strong correlation between global satisfaction rates and recommendation rates
shows that advocacy is the most likely to be influenced by satisfaction when compared
to trust and purchasing more.

A poor experience will also see you slipping behind the competition. Consumers are
least likely to advocate for a brand after a poor experience, compared to trust (21%)
and purchasing more (24%).

+ Improve satisfaction to grow loyalty across the board Across all the countries and
industries we asked about, there was a strong correlation between the three loyalty
metrics of trust, advocacy and purchasing more. By focusing on customer satisfaction,
you can improve all three metrics, improving your chances of expanding your customer
base, getting repeat business and improving sales.

+ Be proactive – Standing still will cause you to fall behind Proactively
developing and maturing a CX program that improves experiences, not only
increases trust, advocacy and number of purchases, it also gives you that all
important competitive advantage.

24
 What’s How to improve the customer experience

next? A lack of investment in customer experience management can have real

consequences for your sales and growth. By putting a focus on your
CX program, you can increase customer satisfaction, drive loyalty and increase
your return on investment.

Qualtrics XM Institute explains how you can begin to make customer experience
your competitive advantage:

+ Connect CX metrics with business results Although our research shows

that CX correlates to customer loyalty, you will need to justify the investment
within your organization. Start by identifying which loyalty behaviors you’re trying
to improve and then examine how those customer actions improve when your
CX metrics improve. To secure buy-in, involve financial and revenue management
leaders, use existing metrics and conservative estimates, and communicate
results with a simple storyline.

Learn more about how to prove READ MORE

the ROI of your CX program

25
 + Focus on improvements, not measurements When companies obsess over a
metric rather than using the score to drive improvements, their progress improving
the experience can stall. To avoid that – and keep the focus on CX improvements
and resulting business outcomes – leaders should always ask two questions
whenever their team presents CX data: “What have we learned?” and “What
improvements are we making?”

+ Start by making (and sharing) wins Organizations looking to gain momentum

in their CX program should focus on demonstrating CX value through quick wins
in order to secure senior executive buy-in and resources. Set up simple listening
posts, look for evidence of broken customer journeys, focus on the problems that
are quickest and easiest to fix, and share stories about how the changes helped
customers and improved business metrics.

26
READY TO GET STARTED?
Get started with Qualtrics.
Request a demo to learn more.

BOOK DEMO