Poor customer experiences could cost businesses $3.8 trillion in global sales, according to new research from Qualtrics. This figure, based on World Bank data and insights from the Qualtrics 2025 Consumer Trends Report, marks a $119 billion increase from last year. The findings reveal how critical customer experience is to driving loyalty and revenue.
More than half of consumers (53%) say they cut spending after a bad experience, with 12% of brand interactions failing to meet their expectations. Sectors most vulnerable to spending cuts include fast food (66%), department stores (65%), online retailers (64%), and auto dealers (63%).
Service delivery issues remain the most frequent trigger for dissatisfaction, cited in 46% of negative experiences. Communication problems (45%) and poor employee interactions (39%) also rank high. While price, quality, and after-sales support are less common pain points, they still pose risks for brands.
“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 they can trust they’re going to get the product and service they’ve been promised, and see value from their purchase – and they’re rewarding brands that do it well,” said Isabelle Zdatny, customer loyalty expert at Qualtrics.
Frontline employees also face significant challenges such as lower engagement, pay dissatisfaction, and feelings of exclusion. These trends are particularly acute in physical retail and table-service restaurants. Addressing employee well-being is increasingly critical to ensuring positive customer interactions.
Qualtrics suggest five ways businesses can deliver a great customer and employee experience this holiday season:
- Ease Frontline Pressure: Streamline processes and invest in training to empower employees managing customer interactions.
- Communicate Clearly: To build trust and reduce confusion, keep customers informed throughout the purchase journey.
- Honour Promises: Deliver on commitments, such as next-day delivery, to maintain customer confidence.
- Adapt to Needs: Use insights from surveys, reviews, and social media to stay ahead of changing customer expectations.
- Exceed Expectations: Focus on key moments that matter, especially in high-stakes person-to-person interactions.