What Happens After a Bad Experience

Moira Dorsey, Head of Qualtrics XM Institute

Explore the nuances of customer experiences with Moira Dorsey, Head of Qualtrics XM Institute. Learn about the impact of negative experiences on loyalty and revenue, the lasting effects of single bad encounters, and the shifting consumer priorities towards quality over price.

In this illuminating interview, we sit down with Moira Dorsey, the Head of Qualtrics XM Institute, to explore the intricate world of customer experiences (CX) in Southeast Asia (SEA). Drawing from extensive research conducted by the Qualtrics XM Institute, Dorsey sheds light on the critical factors that impact customer loyalty and revenue.

  • The SEA Landscape: Negative Experiences and Their Ripple Effects Customer interactions in SEA can be a double-edged sword. While positive experiences foster loyalty and growth, negative encounters can have far-reaching consequences. Moira delves into negative experiences that significantly harm customer loyalty and financial outcomes. From poor service encounters to shattered trust, these repercussions extend beyond immediate monetary losses.
  • The Power of a Single Bad Experience: A single unfavorable interaction can permanently sever ties with a customer. The cost isn’t merely financial; it reverberates through brand perception, trust levels, employee engagement, and overall loyalty. Rebuilding these shattered elements takes time and effort.
  • Understanding Customer Expectations To deliver exceptional CX, organizations must grasp customers’ expectations. Identifying pain points, understanding journey difficulties, and pinpointing areas for improvement are crucial. For instance, consistent failure to meet fast, reliable service promises erodes loyalty.
  • Quality Over Price: A Paradigm Shift Moira’s research reveals a paradigm shift: product and service quality and robust customer support now wield more influence over consumer buying decisions than price. Brands must empower their customer-facing employees to provide outstanding online and in-person experiences.
  • Industry Variations in Negative Experiences Industries play a pivotal role. Tangible product or service purchases yield higher satisfaction than subscription-based models (such as insurance premiums). Highly competitive sectors prioritize experience as a differentiator, leading to elevated satisfaction levels.

Join us as we unravel the complexities of CX in SEA and glean insights from Moira Dorsey’s wealth of expertise.

Full interview; 

Based on the Qualtrics XM Institute research, many customer interactions in SEA lead to negative experiences, causing substantial financial losses. Can you detail the types of negative experiences that most harm customer loyalty and revenue in the region?

All it takes is a single bad experience to lose a customer forever. Qualtrics XM Institute research shows this cost can be significant, but the consequence extends far beyond the near-term dollar value. Poor customer service experiences impact brand perception, trust, employee engagement, and loyalty. While these benefits can be quickly lost, they often take much longer to rebuild.

To deliver a great customer experience, organizations must understand their customers’ and prospects’ expectations, where they encounter difficulties in their journey, and what improvements are needed. For example, if a brand fails to live up to a promise of fast, reliable service regularly, that would be a strong indicator that its customer loyalty will not be high.

Right now, our research shows product and service quality and the quality of customer support have a greater impact on consumer buying decisions than price. For brands, this means they need to focus on enabling their customer-facing employees to provide a great experience – online and in-person – and empowering them to resolve queries rapidly. 

How do negative experiences vary across industries in Southeast Asia?

The type of industry and engagement can have an impact on customer experience. For example, customers purchasing a tangible product or service tend to have higher satisfaction than those activating a subscription or membership, such as an insurance premium. Similarly, we tend to see higher satisfaction in highly competitive industries because the leading brands invest in experience as their differentiator.

How can businesses in these industries use your findings to enhance their customer experience strategies?

Improving customer experience and understanding consumers’ evolving needs, expectations, and preferences are at the top of every leader’s mind, and they are focused on driving growth and savings right now. Research from PwC shows CEOs view evolving consumer demands as one of the driving factors changing how their business creates, captures, and delivers value over the next five years.

There are four key pillars organizations must prioritize to understand these evolving demands and identify friction and unmet needs to deliver great experiences that keep customers coming back:

  • Listening, responding, and taking action on customer feedback. To deliver the experiences customers want, organizations need a portfolio of listening tools to understand how they think and feel. By capturing feedback at the moments that matter most in the customer journey, organizations can tailor experiences to drive the greatest business outcomes.

  • Delivering a great employee experience to customer-facing employees. Customer-facing employees have the biggest impact on customer experience. Yet our research shows they often report the lowest levels of morale and satisfaction, which can negatively impact the service and support provided.

  • Improving digital support. Organizations overwhelmingly expect digital channels to contribute to increased revenue growth. Yet satisfaction with digital support is meaningfully lower than digital buying journeys. By addressing this experience gap, businesses can avoid the risk of lost revenue and loyalty to maintain and grow their market share.

  • Continuing to invest in CX: Organizations must invest in their experience management programs and capabilities to keep pace with an ever-evolving landscape of consumer expectations, needs, behaviors, and new capabilities like GenAI.

Given the significant financial impact of poor customer experience, what strategies can Southeast Asian businesses use to mitigate risks and boost profits? How can they prepare for emerging trends affecting customer behavior and expectations in the region?

AI will be a bigger transformative technology than the internet and mobile — and when we look at the early innovations and possibilities centered around experience management, it’s easy to see why. 

AI can help CX teams and agents quickly and confidently analyze customer feedback to identify and respond to points of friction or opportunities in their business in seconds; it is helping free teams from tedious manual tasks — like data entry and analysis — so they can spend more time delivering value to customers, and it’s helping managers better understand and address the needs of the teams they lead to drive improved outcomes for customers and employees.

As leaders look to incorporate AI into their customer experience programs, there are three key things to remember: the importance of human connection, the fact that data is the greatest differentiator, and how early movers and -adopters have a competitive advantage.

Organizations also need to be aware that customers are not giving feedback like they used to, meaning they need mechanisms and processes to capture and respond to feedback in all the places it’s being shared. This shift allows organizations to create a more authentic view of their customer experience by surfacing insights that may not have come up in a traditional survey. 

What role do you see technology playing in helping Southeast Asian businesses deliver exceptional customer experiences in the future?

The rise of digitally native brands and their focus on exceptional customer experiences has raised the bar for all businesses. This creates a delicate balancing act: businesses must elevate the customer experience to meet rising demands while maintaining operational efficiency to navigate economic challenges.

While it might sound counterintuitive, AI will bring more humanity to business. By enabling organizations to understand better and address customer and employee needs, AI will lead to positive outcomes, including reduced wait times, personalized experiences, automating mundane tasks, easier access to information, and much more. 

As customer needs and behaviors change, businesses turn to experience management technology to unlock the insights to make fast, confident decisions driving growth, loyalty, and productivity.