How big is the customer experience gap? Based on our research, it’s much bigger than many brands believe.

ActionIQ surveyed more than 400 consumers and 350 businesses as part of our inaugural CX IQ Index. We wanted to understand what matters most to consumers when it comes to customer experience — and how today’s brands are measuring up.

The results are clear: Many brands significantly overrate the performance of their CX strategies compared to how consumers perceive them, putting revenue and customer retention at risk.

Read on to learn more about the customer experience gap and how to close it.

Brands Must Recognize the Customer Experience Gap to Close it

Identifying the CX Gap

We asked businesses across industries to rate overall satisfaction with their companies for customer experiences and interactions to get information, make a purchase or resolve an issue.

Using a scale of 1 (“not at all satisfied”) to 5 (“very satisfied”), 61% of U.S.-based respondents said their customers are “very satisfied.”

While businesses are generally confident in the customer experiences they provide, evaluations differ across industries.

Sixty-nine percent of media/publishing and B2B technology brands said their customers are “very satisfied.” Sixty-seven percent of financial services brands said the same. Retail brands came last at 50%.

But even the lowest self-assessments far outpace consumer sentiment: Only 23% of consumers said they were “very satisfied” with brand experiences and interactions over the past three months.

And when it comes to the characteristics consumers say are most important to customer experience, businesses across industries consistently overestimate their performance.

The gap between what businesses believe and what their customers describe indicates that, regardless of the vertical, many brands are not investing in the people, processes and technologies they need to meet customer expectations.

Tracking the Customer Experience Gap Across Industries

When asked to rate how well they perform across different CX characteristics (“protects my data,” “understands my needs,” etc.) by scoring themselves on a scale of 0-100, businesses were consistently more likely to rate their performance as “very strong” (90 or higher) when compared to consumers.

However, there were notable differences across industries, including:

Media/Publishing

Brands in the media/publishing industry demonstrate the widest gap between perception and performance, as they were significantly more likely than consumers to rate their performance as “very strong” across nearly all CX characteristics (often by 20 percentage points or more).

For example, when it comes to protecting customer data — the characteristic most important to CX, according to consumers — 49% of media/publishing brands rated themselves as “very strong.” Only 22% of U.S. consumers did the same.

Financial Services

While financial services brands tended to perform best across the CX characteristics most important to consumers — receiving higher scores more frequently from consumers than brands in other industries — they still substantially overestimated their performance (typically by 10 percentage points or more).

This was evident across many of the characteristics consumers said were most important to CX, including “respects my privacy” (62% versus 45%), “is available when I need them” (54% versus 38%) and “understands my needs” (54% versus 34%).

Retail

While retail brands were the least likely to say their customers are “very satisfied” with their customer experiences and interactions, they’re still far more likely than consumers to laud their performance across most CX characteristics.

With that said, brands in the retail industry were the only ones more likely to have their performance rated as “very strong” by consumers across any CX characteristics. For instance, when it comes to resolving problems quickly, 33% of consumers rated retail brands as “very strong,” compared to only 32% of retail brands themselves.

B2B Technology

Because of the business-to-consumer focus of our inaugural CX IQ Index, no data was collected to compare B2B buyer ratings with B2B technology brands’ self-assessments.

However, brands in the B2B technology industry should be wary — the overarching trend across all other industries is that businesses overrate the quality of their customer experiences when compared to consumers.

Closing the Customer Experience Gap

With so much time, energy and money spent on acquiring new prospects, converting them into customers and building up their brand loyalty, no business wants to believe it’s falling short.

But the data doesn’t lie. And in a competitive marketplace where CX is only becoming more important — and many businesses are losing the customer insights they relied on to provide relevant, impactful experiences — brands can’t afford to stay in the dark.

To close the CX gap, brands need solutions that will not only enable them to uncover and analyze customer insights, but also take action on them.

It doesn’t matter if you believe you’re delivering exceptional CX if your customers disagree. Acknowledging that a problem may exist — and exploring solutions to it — is the first step toward raising your CX IQ.

Learn How to Close the CX Gap

Download the 2022 CX IQ Index to learn which CX characteristics are most important to consumers, how consumer sentiment varies across verticals and what you can do to improve your performance.

This post first appeared on the ActionIQ blog. To see the full article, click here.