During the past year, I’ve reported on surveys by the Strativity Group and Right Now Technologies that say that customers will spend more with companies that provide excellent service and that they feel duty-bound to tell others about bad experiences. This week, American Express released a new customer service survey that confirms and adds to the understanding that customers will base their purchasing decisions on how well they or others are treated.
If three surveys (and probably more) in one year are saying the same things, why aren’t companies getting it? Do they think that the attitudes don’t apply to their customer relationships? Or have they forgotten why they’re in business? (Hint: to serve their customers)
Here are some highlights from the U.S. portion of the American Express Global Customer Service Barometer, which was conducted in the U.S. and 11 other countries:
- Americans will spend 9% more with companies that provide excellent service (Strativity said 40% of customers are willing to pay an additional 10%)
- In the current economic climate, only 37% of Americans believe that companies have increased their focus on providing quality service, 27% say these companies have not changed their customer service attitudes, and 28% say that companies are paying even less attention to good service than before.
- One in five feel companies take them for granted.
- 81% are more likely to repeat business after a good service experience and 52% will never do business with a company again after a poor experience.
- 91% of Americans base their decision to do business with a company on its level of customer service.
As we also know, the internet has changed the landscape of communication about customer experiences, but here are some actual numbers from the American Express survey:
- 48% use online postings or blogs to get others’ opinions about how companies treat their customers
- 57% put more emphasis on negative blog and social networking reviews than on positive ones.
What are your customers saying about you?
Frankly, these statistics should not be surprising. All you have to do is have casual conversation about service with people you know. As a consultant in customer experience, I could write a book on how people feel about the companies they do business with based purely on anecdotal evidence. When people hear what I do for a living, they often say, “Let me tell you a story about what happened to me …”
The news isn’t all bad. Some 86% of customers say they’re willing to give companies a second chance if their previous experiences have been great and 50% of Americans say it usually takes two bad service experiences before they’ll walk away.
Worldwide, consumers in 11 of 12 countries surveyed feel customer service has become more important in the current economy (The only exception was the Netherlands. Maybe they’re too focused on the World Cup).
While we aren’t surprised, companies still can’t figure out how to claim that “Great customer service” mantle. Maybe it’s because 80% of companies believe they provide a superior customer experience but only 8% of consumers agree (Bain and Company, 2005).
Here are some things you can do:
- Analyze each of your customer touch points. Where do you touch the customer? How well are you doing in that touch point? What can you do to improve the experience during that touch point?
- Make each customer feel that you are on his or her side. Be a customer advocate. If you’re worried about spending the company’s money, remember the statistic about how much more happy customers will spend.
- Give your people the authority to act on behalf of the customer. Companies quash this authority with everything from overbearing, ridiculous rules to providing scripts that tell customer service representatives what they can and can’t say. We have all had too many experiences where we just knew the employee would do something right for us but was restrained by management.
The numbers in these surveys don’t lie. None of these surveys are outliers – totally different from the others. They say the same thing: Customers will pay more and do more business with companies who provide excellent experiences and they will gladly spread the word about companies who don’t. If your company’s customers are not in the first category, you’re doing something wrong.
Tags: American Express, bad experience, bad service, Companies don't get it, customer experience, Customer Experience Ownership, customer service, customer service surveys, customer surveys, Global Customer Service Barometer, impersonal service, surveys, upset customers
July 9, 2010 at 5:55 pm |
I think that a big part of the challenge for companies is that they have cut their customer service resources so dramatically that the investment to revitalize customer service exceeds the forecast return on that investment. It is a frustrating situation that I have seen at several companies.
July 9, 2010 at 9:11 pm |
Agreed, Bob. Sadly, companies who cut resources for customer service are communicating what was probably always true: They don’t care about service. Short-term bottom line improvements that come from cutting expenses come back to smack you in the head later on when customers bite back.
July 11, 2010 at 9:00 pm |
As someone who has worked in customer service for 15 years and learned the ropes of customer service excellence, I’m frankly not surprised by this report. It has always been true that good service will bring added revenue while poor service sends them running away in droves. Adding the internet to our shopping habits has changed this dynamic considerably. I don’t do on-line shopping any more, but a former co-worker who did computer networking told me that if he has to wait for more than 10 seconds to connect to a web-page he won’t return to it. It should make everyone in customer service sit up and take notice of how fast — and it has always been pretty fast — they can lose someone’s business.
July 11, 2010 at 9:56 pm |
Great point about the 10 second rule your former co-worker has. In an earlier post, I talked about how everything is about expectations. Expectations are always changing and what was considered fast even a year ago can be slow as molasses today. Customers’ perception of service is vastly affected by their expectations. Your friend’s expectations changed. It’s not right or wrong, it just is and those serving him have to understand that.
July 15, 2010 at 7:51 pm |
Very nice post. I think a lot of the problems are the decision makers at the firms that ultimately rely upon good customer service (a) make their decisions on cost accounting principles (b) they are so far removed from the customer that they just don’t understand customers, therefore don’t get customer service. What I mean by cost accounting is management tries to squeeze every last penny out of every resource, usually to the detriment of the resource. For example, management might outsource its customer service to the lowest bidder. That lowest bidder will most likely provide the worst service out of the competing contracts. Sure you save money on the front end, but you get killed on the back end when you lose customers. To me the problem is we can easily calculate the amount of money we saved (cost accounting) by hiring Firm “X” but we can never really calculate the true impact that poor customer service brings, i.e. lost sales. .
July 16, 2010 at 4:26 pm |
Customer service has always been important, more so now then ever before. Mary Kay always said when talking to a person to imagine them wearing an invisible sign that says: “Make me feel important”. It’s also important to listen to and ask for feedback.
July 20, 2010 at 9:03 pm |
“An invisible sign that says ‘Make me feel important”! What a great idea! I love it. Thanks Adrienne.