Experience debt can be defined as the gap between a customer’s expectations and the actual experience they receive from a product or service. When a company compromises on usability and pleasure, it incurs a set of costs that affect both the customer and the business. These costs can manifest in the form of decreased customer loyalty, lower customer lifetime value (CLV), and a reduced potential for word-of-mouth referrals and recommendations.
In a world where customers rely increasingly on ratings and reviews to make purchasing decisions, experience debt can be particularly damaging to a company’s reputation and bottom line. If customers have a negative experience with a product or service, they are more likely to leave negative reviews and recommendations, which can deter potential customers from making a purchase. Additionally, if customers have a negative experience, they are less likely to become repeat customers or recommend the product or service to others, which can lead to a decrease in customer loyalty and CLV.
The Agile Brand Guide to Marketing Operations (2023) by Greg Kihlström