Poor customer experiences cost Australian businesses up to $66 billion in lost sales as consumers cut their spending in response to bad experiences, according to new analysis from Qualtrics XM Institute.

The findings come as Australians prepare to spend a record $6.8 billion over the Black Friday and Cyber Monday weekend alone.

The Qualtrics’ research reveals that 41% of surveyed Australian consumers will reduce or completely stop spending with a company after a negative experience.

“With shoppers actively waiting for big sales events like Black Friday to make larger purchases or tackle their Christmas shopping, businesses can’t afford to let poor experiences undermine such a critical window,” says Qualtrics Head of Customer Experience Solution Strategy Ivana Papanicolaou.

“Australians are being intentional with their spending, looking for greater value, and one bad experience can be enough to send them to a competitor.”

Friction points

For 46% of surveyed Australian consumers, pricing issues remain the breaking point for purchase decisions.

This was followed closely by communication problems and service delivery issues (both 42%), and product quality issues (34%). During peak season, these friction points compound as businesses face higher volumes and stretched resources.

“Shoppers will put up with longer wait times or busy stores if they’re getting value,” says Ms Papanicolaou. “But when the issue is pricing itself – unexpected fees, inconsistent discounting, or value that doesn’t match expectations – tolerance disappears immediately.”

The silent feedback loop

The challenge for businesses is that spending cuts often happen without warning.

Almost a third (31%) of surveyed Australians don’t tell anyone about a bad experience, nor a good experience (27%).

Qualtrics says this silent feedback loop is particularly concerning given businesses’ increasing reliance on AI-powered customer service tools. According to Qualtrics’ ‘2026 Consumer Experience Trends Report’, nearly one in five surveyed consumers who used AI for customer support saw no benefits at all – a failure rate said to be almost four times higher than other AI applications.

“Rather than solving problems during the busy peak season, poorly deployed AI risks create more frustrated customers who simply take their business elsewhere,” says Ms Papanicolaou.

Addressing the customer experience

According to Papanicolaou, businesses looking to protect their bottom line during this critical trading period should:

• Empower frontline employees to solve problems. “During peak season rush, frontline staff can see problems but often lack the authority to fix them quickly. Closing that gap is essential for retaining customers, particularly during a busy season like Black Friday.”
• Understand specific customer needs. “Leading organisations know what excellent experience means for their business and customers during busy times, and build around executing that definition, especially during high-volume periods.”
• Frame customer experience as risk mitigation. “With up to $66 billion in Australian sales at risk, poor experiences represent a clear financial threat that demands executive attention and investment.”

“Customer experience isn’t a separate initiative – it’s a fundamental business discipline that directly impacts revenue,” says Ms Papanicolaou.