In early 2022, customer patience with pandemic-era excuses ended. Entering the 4th quarter of 2023, CXOs have finally been able to pull themselves out of the CX death spiral. The data is clear: for companies with existing poor service scores, your industry as a whole is at risk of losing half your existing customers.
Customers were remarkably flexible in 2020, but as COVID-concerns waned, so did their patience. “Customers are now savvy to the fact that supply chain, safety, and staffing challenges are well-established market conditions—not sudden pandemic blows.” wrote Arianne Cohen for Bloomberg back in December of 2021. At that time, poor service had reached the highest level since 2009, as reported by The UK Institute of Customer Service. Those days are over.
Customer satisfaction is on the rise.
In Q2 of this year, for the first time since 2019, The American Customer Satisfaction Index, shows improved marks across the board. Customer satisfaction has done more than level off, it has increased in its largest quarterly gain since 2008. The ACSI report notes the increase is being driven by gains in industries like automobiles, appliances, and technology. Consumer sentiment is also improving. The Index of Consumer Sentiment from the University of Michigan shows a rise of 19.4% from the previous year.
Taking the top scores are insurance brands, luxury hotel and fashion brands among others. Partnered with Statista, Newsweek points out a few brand winners throughout the 2019 pandemic were Publix, Southwest Airlines and Chick-fil-A. Categories like shoes and clothing brands also seemed to do quite well with Under Armour, Von Maur, Ecco, Duluth Trading and others.
It’s good news for the industry as a whole, but bad news for your if you haven’t seen the same turnaround.
What does this mean for CXOs?
The last few years of CXO survival mode is understandable, but the dust settles, it’s clear your competitors have learned vital lessons. As we head into economic uncertainty, that puts you on the chopping block. Statista has recorded half of consumers are willing to switch to a cheaper brand as budgets tighten. Customer experience is the only tool you have to keep that business.
To simply move forward without a full report on the good, and bad from 2019 to 2023 is a fatal flaw. You know recessions, global disruptions, and other economic problems are in your future, so now is the time to make improvements and put plans in place to eliminate customer churn. Does your call center need upgrades? Is your software poorly integrated? Is now the time to learn how to integrate CX systems with AI?
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Justin Kent is Editor in Chief for 3 Tree Tech. His work focuses on how security and CX technology empower leaders to scale faster. He has previously written for The Wall Street Journal, Washington Post, Harvard Business Review and others.