Data from the XM Institute have shown that most industries, to some degree, deliver bad experiences to their customers. To understand the potential ramifications of these bad experiences, including how they affect spending, we analyzed data from 10,000 U.S. consumers about bad experiences they had with companies and what they did after those experiences. Here are some highlights from this research. For more in-depth findings, see the Key Takeaways included in each figure:
- Bad experiences are fairly rare. No industry had more than one-fifth of its customers reporting a bad experience. The proportion of consumers who reported having a bad experience with a company ranged from a low of 5% in the streaming media, grocery, and consumer payments industries, to a high of 18% in the airline industry.
- Bad experiences are on the rise. Most industries – 15 out of 20 – saw an increase in the proportion of their customers reporting a bad experience. The airline industry saw the largest increase, doubling from 9% of its customers reporting a bad experience to 18% of its customers reporting a bad experience. The changes for the five industries that experienced a decline in bad experiences, namely the fast food, health insurance, TV/ISP, and utility industries, were marginal.
- Bad experiences can be costly. In each industry, a significant proportion of consumers are likely to decrease spending or stop it altogether after having a bad experience. This potential risk is lowest for industries with less consumer choice – such as health insurance and utilities – and highest where there’s reasonable competition allowing consumers to switch between companies – such as fast food, airline, and grocery. According to our Sales at Risk Index, bad experiences can be the least costly for the consumer payments industry and most costly for the airline industry.
- Percentage of Bad Experiences Delivered, by Industry
- Percentage of Bad Experiences Delivered, by Industry, 2019 and 2020
- How Consumers Cut Their Spending After a Bad Experience, by Industry
- How Consumers Cut Their Spending After a Bad Experience, by Industry, 2017 and 2019
- Sales at Risk Due to Bad Experiences