Estimated read time: 3-4 minutes
PROVO — If you've ever shunned a business or company after a bad customer service experience, you're far from alone. Even just one bad experience for the customer often leads to lost revenue on the business side, too.
Bad customer service threatens $3.7 trillion annually for organizations around the globe, according to new research from the Provo-based Qualtrics XM Institute. This is a $600 billion increase compared to projections from last year.
Qualtrics' global study also found that consumers say they have very negative experiences with organizations 14% of the time across 20 different industries including fast food, parcel delivery services, auto dealers and airlines.
This leads to consumers stopping or reducing their spending with that particular company more than half the time (51%). This figure is elevated when it comes to fast food and parcel delivery services, where the cost of switching isn't as big of a factor.
"The price tag on delivering a bad customer experience has surged, even as many industries managed to reduce the frequency of bad experiences in 2023," Bruce Temkin, head of Qualtrics XM Institute, said in a press release. "While many industries reduced the frequency of their bad customer experiences, the price tag associated with those mistakes has surged."
Temkin added that today, companies need to be "more careful than ever" not to mistreat customers at the risk of digging themselves into a long-term hole as customers jump ship and head to their competitors.
Using nonhuman technology to address human issues
With this in mind, the question that should be posed is how can companies improve the human experience? And can it be done by harnessing artificial intelligence?
Research from the institute shows that investing in frontline employees pays off with an improved customer experience.
At the same time, the research found that frontline workers — like cashiers, bank tellers or restaurant servers — have the worst morale, compared to other types of employees, and they feel a lack of support to effectively do their jobs. Only one-third of frontline employees who have been with a company for less than six months intend to stay more than three years.
This is leading more companies to lean into AI and how it can reduce the burden on frontline workers and increase their productivity.
"Done well, AI can make frontline workers more effective and give customers faster access to the things they need," said Temkin.
The most common use of AI, employees say, is in automating the more routine, mundane tasks, giving them the time to focus on more complex work — like dealing with human customers.
It's a good thing, too, as the study showed that consumers still want the human connection to be present.
Nearly three-quarters (73%) of consumers are comfortable using an AI chatbot for simple, transactional activities like checking the status of an order. However, they aren't as comfortable using it when the stakes are higher. For example, 81% of consumers want to speak with a human being for advice on a medical issue.
"With consumer trust hitting record low levels and fears of job loss among employees, organizations must take measured steps in incorporating AI into their business," Temkin said.
Aside from providing guidance for businesses, the research also suggests that AI can be effectively incorporated into the customer service experience without eliminating the need for human connection.
