Businesses in Hong Kong are risking 6.5 percent of their revenue, due to poor customer experiences – putting HKD 117 billion in consumer spending at risk in the region, according to new research from Qualtrics XM Institute.
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Based on the data released by the company, including 693 respondents in Hong Kong, consumers say they have very poor customer experiences with organisations 15 percent of the time. After receiving a poor customer experience, 43 percent say they reduce their spending with that brand or stop spending with them altogether.
After another year of change and disruption for consumers, the study – conducted between August and September 2022 – reveals government agencies (30 percent), airlines (25 percent), and property insurers (21 percent) have the highest percentage of consumers who recently had a “very poor” customer experience. In contrast, streaming services (6 percent), supermarkets (7 percent), and department stores (8 percent) have the lowest percentage of consumers who recently had “very poor” customer experiences.
“Delivering on brand promises to keep customers coming back is essential for the long-term success of a business, and this research shows the actual impact on the bottom line when customer experience misses the mark. In tighter economies, shoppers will be more careful about their spending, and a single negative experience could be enough to lose them as a customer forever,” said Bruce Temkin, Head of Qualtrics XM Institute.
The CX Trends organisations must prioritise in 2023:
Source: Blake Wisz/ Unsplash
Customer loyalty will be won through personal connections more so than through operational efficiency
A personable service agent has a bigger impact on consumer satisfaction than a short wait time during customer interactions in Asia Pacific and Japan. For example, when a consumer talks to an empathetic agent in the region, they are 4.5 times more likely to be happy with the overall experience than consumers who are not satisfied with how empathetic the agent is. In contrast, consumers with a short wait time are 2.4 times more likely to be happy with the overall interaction than those dissatisfied with wait times.
Efficiency still has a very important place in the customer experience, and there are tasks where people would rather self-serve than speak to a representative. Organisations will need to understand what their customers want in a given situation to leave them with a positive experience.
Brand switching likely to increase in 2023, unless organisations take action to exceed customer expectations
As consumers think more carefully about their spending, companies that exceed expectations with how they listen, understand, and act on customers’ needs can build long-term loyalty. With more than half (55 percent) of consumers in Hong Kong saying they’ve had customer service issues go unresolved, and 39 percent not satisfied with the empathy they received from a customer service agent, there is a significant opportunity for organisations to exceed expectations and win loyalty. When consumers have a five-star experience, they are 2.3 times more likely to trust and 2.1 times more likely to recommend the company, compared to those receiving a poor experience.
Unstructured feedback will be increasingly essential to understanding and meeting consumer needs
Almost three quarters (70 percent) of consumers in Hong Kong say companies need to do a better job of listening to their feedback – up 21-points on 12 months previously, showing improvement is urgently needed. At a time when consumers are talking about brands on social media and in reviews, one way companies can improve their listening is by using insights from chats and other qualitative responses to understand a consumer’s specific situation and how to respond appropriately in real time.