As the examples from Zappos, Disney, JetBlue, and the other businesses discussed here clearly show, the strategy of building strong repeat business through consistently delightful service experiences really does work. That conclusion is also backed up in an extensive Customer Acquisition Study from Hubspot, where it’s noted that happy customers share positive experiences at a 77% rate. A whopping 90% report that they are likely to purchase more with a good experience, while as many as 93% plan to purchase again. The same study also determined that word of mouth is the leading factor for a customer’s decision to make a purchase, at 55% — while only 22% decide to purchase after speaking with a salesperson.

The High Cost of Mediocre Service

On the other hand, it’s equally clear that when customers have a poor or even mediocre experience, they’re quick to disengage and switch brands. More and more, it’s just not enough for companies to promote their efforts to improve service — they have to actually deliver. As many as 91% of customers are likely to refuse to give a business a second chance after a negative service experience, and 82% of customers report deciding to switch brands after a negative customer service experience. According to Forrester’s 2018 CX Index report, the U.S. market has seen negative overall trends in customer experience ratings across industries for the last three years, with most individual company scores largely stagnating or even dropping.

The picture gets even darker when you consider the projected revenue loss that results from brand-switching. According to a report from New Voice Media, U.S. companies will lose over $75 billion in revenue due to customer-switching in 2018 alone, representing a 17% increase over the $62 billion lost in 2016. Looking at the bigger picture, Accenture has previously estimated that the total annual cost of customer-switching could be as staggeringly high as $1.6 trillion. It’s likely that those numbers will only continue to trend in that direction, given that a study by Walker indicates that customer experience will outweigh factors such as price and even product as the primary factor in brand differentiation by 2020.

Customers Are Skeptical That Companies Really Care About Great Service

Company leaders routinely promote initiatives to improve service experiences and attempt to reassure customers that their feedback is being heard, with a recent Forrester report indicating that 72% of business leaders and senior executives claim to prioritize customer experience improvements. But customers are more skeptical than ever when it comes believing that companies actually care about them, and for good reason. The report also notes that only 63% of marketers actually prioritize implementing technological solutions for customer experience problems, while research by Zendesk indicates that 87% of consumers feel businesses need to step up their efforts to create a more consistent, seamless experience.

The truth? Customers appear to be correct. In a wide-ranging, just-released Customer Service Benchmark Report from SuperOffice, it’s noted that a majority of companies surveyed failed to meet customer expectations in service interactions. In fact, 62% didn’t even respond to customer service emails, while 90% of the companies didn’t even issue a standard response to assure customers their service inquiry had been received.

Small wonder, then, that customers also report being widely skeptical of company claims about their own products or services. 69% of customers don’t believe company advertisements, and 71% are not persuaded by company ads on social media networks. The bottom line is this — while advertisements, marketing campaigns, and sales outreach programs may be effective at gathering initial interest from customers, they have little positive effect in persuading those customers to take action and commit to a purchase.