Australian firms risk $71 billion due to poor service

Research from Qualtrics reveals that poor customer experiences could result in up to AUD $3.8 billion in lost sales for Australian businesses during the holiday period.

The study further indicates that annual losses could amount to AUD $71 billion in Australia and AUD $5.8 trillion globally due to unsatisfactory customer service.

These numbers highlight the vital importance of delivering reliable customer service, especially in high-stakes shopping periods.

According to the research, 54% of Australian consumers are inclined to reduce spending after a negative customer experience, and one in ten brand interactions fail to meet their expectations.

Globally, sectors including fast food, department stores, online retailers, and parcel delivery face the highest risk of lost revenue following poor service experiences.

The research also identifies communication, service delivery, and pricing issues as the primary pain points for Australian consumers, with 46% highlighting communication as a concern, 44% pointing out difficulties with service delivery, and 39% troubled by pricing.

Ivana Sekanic, Customer Experience Strategist at Qualtrics, commented, "The holidays are a critical sales period and this year the stakes are higher than ever with cost-of-living pressures expected to impact sales.

Customers want to be kept up to date on what's happening with their orders, know brands recognise and understand what they need, and that they can trust they're going to get the product and service they've been promised - and they're rewarding brands that do it well."

The study highlights challenges faced by frontline workers who play a significant role in shaping customer experiences. These employees, often in retail and hospitality sectors, report lower levels of engagement, intent to remain in their roles, and perceived fairness in compensation.

Dr Cecelia Herbert, Workplace Behavioural Scientist at Qualtrics, stated, "Frontline employees have the most direct influence on customer experiences, yet these are the people who report the lowest levels of engagement and morale at work.

If businesses are depending on strong holiday trading, they must start with employees. Simple fixes that improve their experiences at work can have exponential benefits - cultivating an engaged, high-performing team translates to satisfied, loyal customers who spend more."

The research outlines strategies for enhancing both customer and employee experience during the holiday season, such as alleviating pressure on frontline employees by simplifying their tasks, improving communication to minimise customer confusion, maintaining promises like on-time delivery, and utilising customer feedback to remain responsive to evolving consumer needs.

Organisations are encouraged to focus on exceeding expectations during critical moments to build trust and contentment among customers and employees.