Businesses could face losing billions for bad customer service, as Australian consumers become increasingly disenchanted with poor performers.

Research by experience management company Qualtrics found consumers reported one in 10 interactions with brands resulted in a bad experience in 2023, down from one in five the previous year.

Although they reported fewer negative experiences, Australians’ tolerance for bad customer service dipped.

More than half of bad experiences resulted in consumers cutting their spend in 2023, compared to 37 per cent the previous year, which Qualtrics found could lose businesses $74 billion per year.

Ivana Sekanic, head of customer experience solution strategy at Qualtrics, said the type of consumer complaints varies slightly between industries.

The most common consumer pain points across industries are speed of service, helpfulness and updates on services such as deliveries.

Despite the rising cost of products, consumers reported that streaming providers, department stores, supermarkets, online retailers, and electronics makers delivered the least number of poor experiences.

In contrast, government agencies, internet service providers, mobile phone providers, utility companies and property insurers provided the most poor experiences.

Sekanic said the results boiled down to the amount of competition within industries.

Companies in industries such as retail are pressured to better their services and offerings to draw customers away from competitors, but organisations with less competition – such as government agencies – have traditionally not had to work as hard.

“Particularly if you think about the supermarkets, there’s major chains who have invested heavily in customer experience and servicing their customers to the fastest possible ability,” she said.

“Traditionally, [government] organisations haven’t really had to think about what value for money are they delivering [or] being really transparent around the budgets and how they’re managing the budgets.

“[Qualtrics is] lucky enough to work with some of the government agencies here in Australia, and those are the topics that are really front of their mind is, ‘How can we play a bigger role in the lives of our citizens? How can we aid towards how they’re being perceived in the community?'”

Sekanic said companies getting customer feedback – then investing in solutions and acting on it – is key to improving their experiences.

This is where technology such as AI is expected to help more in coming years.

Through sophisticated technology, a global fast food chain can understand what type of experience their customers are having anywhere in the world, Sekanic said.

They can drill down to details such as the difference in quality of food between drive-throughs and the restaurants within any city at any time.

Financial brands can analyse individual customers’ previous calls, emails and surveys while representatives are having a conversation with those customers to pre-empt and address complaints before they are made.

“I think what’s going to happen is in the near future, we’re going to see an increase of better customer experience as a result of AI,” Sekanic said.

“And that’s through leveraging AI to get to faster insights to provide stronger, faster information to a sales or service representative of the brand so that they can serve the customer really quickly.”