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Good Service is Good Business
U.S. consumers are willing to spend more with companies that get service right, according to an American Express survey.
Posted May 9, 2011
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Consumers are placing an even greater premium on quality customer service this year, with 70 percent saying they are willing to spend an average of 13 percent more with companies they believe provide excellent customer service. This is up substantially from 2010, when 58 percent said they would spend an average of 9 percent percent more with companies that deliver great service.

But despite the greater value placed on customer service, many businesses don’t seem to be making the grade with consumers. In fact, 60 percent of consumers believe businesses haven’t increased their focus on providing good customer service, up from 55 percent in 2010. Among this group, 26 percent think companies are actually paying less attention to service.

These findings were released today in the American Express Global Customer Service Barometer, a survey exploring attitudes and preferences toward customer service.

"Getting service right is more than just a nice to do; it's a must do," said Jim Bush, executive vice president, World Service. "American consumers are willing to spend more with companies that provide outstanding service, and they will also tell, on average, twice as many people about bad service than they will about good service. Ultimately, great service can drive sales and customer loyalty."

Americans vote with their wallets when they encounter subpar service; 78 percent have bailed on transactions or not made intended purchases because of poor service experiences. On the other hand, the promise of better customer service is a draw for shoppers: 59 percent would try a new brand or company for a better service experience.

Yet Americans feel most companies are failing to get the message that service matters. Nearly two-thirds of consumers feel companies aren’t paying enough attention to service; 42 percent said companies are helpful but don't do anything extra to keep their business, while 22 percent think companies take their business for granted.

A notable bright spot? Small businesses. Eighty-one percent of American consumers agree that smaller companies place a greater emphasis on customer service than large businesses.

Consumers will tell others about their customer service experiences, both good and bad, with the bad news reaching more ears. Americans say they tell an average of nine people about good experiences, and nearly twice as many (16 people) about poor ones.

Customers who have a fantastic service experience say friendly representatives (65 percent) who are ultimately able to solve their concerns (66 percent) are most influential.

"There are many who subscribe to the convention that service is a business cost, but our data demonstrates that superior service is an investment that can help drive business growth," Bush added. "Investing in quality talent, and ensuring they have the skills, training, and tools that enable them to empathize and actively listen to customers are central to providing consistently excellent service experiences."

Poor service experiences leave many Americans hot under the collar. Fifty-six percent of respondents admit to having lost their tempers with customer service professionals. Consumers age 30-49 are the most frequently angered (61 percent); while young people are more patient, with more than half of those age 18-29 saying they’ve& never lost their tempers with service professionals (54 percent).

Americans who have lost their tempers due to poor service experiences will express their displeasure in a host of ways, including insisting on speaking to a supervisor (74 percent) and hanging up the phone (44 percent). Perhaps most unsettling for businesses on the receiving end of customer anger: 39 percent of Americans have threatened to switch to a competitor.

Not everyone keeps it clean when dealing with a frustrating service situation either. Expletives have crossed the lips of 16 percent of respondents, with men more likely to use choice words (20 percent) compared with women (12 percent).

Businesses might want to ditch their traditional service scripts too. Customers are equally irked by three of the most frequently-used customer service phrases, with the Internet generation particularly put off by not getting a quick answer and people 50 and older grimacing over hold music.

Common Phrase   

General Population Most
Annoyed By This Phrase

   Most Irritated Group

"We're unable to answer your question.
Please call xxx-xxx-xxxx to speak to a
representative from xxx team."

   

27 %

   

People age 18-29: 32%

“We’re sorry, but we’re experiencing unusually heavy call volumes.
You can hold or try back at another time.”

   27%   People age 50+: 34%
“Your call is important to us. Please continue to hold.”   26%   People age 50+: 29%
      

In countries around the world, a majority of consumers are willing to spend more with companies they believe provide excellent service, with the average amount they are willing to spend ranging from 7 percent to 22 percent more.

 

Average Percentage More That Consumers Are Willing to Spend

 
India – 22%     U.K. – 10%
U.S. – 13%     France – 9%
Australia – 12%     Italy – 9%
Canada – 12%     Germany – 8%
Mexico – 11%     Netherlands – 7%
     

However, like in the U.S., global consumers feel that businesses around the world aren't getting the message. In most markets, less than one-third of consumers feel businesses have increased their focus on customer service. And when consumers are dissatisfied with their service experiences, they also get angry; a majority in every market except Germany report having lost their tempers with customer service representatives.

 

Percentage of Consumers Who Have Lost Their Tempers With  Customer Service Professionals

 
Mexico – 86%     Canada – 61%
France – 75%     Netherlands – 57%
India – 73%     U.S. – 56%
Italy – 68%     U.K. – 51%
Australia – 61%     Germany – 37%
       

Companies that have earned a reputation for service excellence understand the employees interacting with customers every day are the true ambassadors of their brands. As a result, finding the right people and putting them in a position to succeed is key. "Our primary focus is on hiring the right people and just letting them be themselves," said Aaron Magness, senior director of brand marketing and business development at Zappos.com. "You can't hire someone and teach them to provide great customer service, but you can hire people that are committed to providing great customer service."

"We believe the key to delivering a great guest experience is listening and building the confidence of the employees to respond to the needs of the customer in a unique way every time," said Jim FitzGibbon, president of worldwide hotel operations at Four Seasons Hotels and Resorts. "Now that more and more people choose to interact and share through social media networks for example, not only do we have to listen in a different way, but the experience itself extends beyond the face to face interaction. Whether at our hotels and resorts or online, having employees who feel empowered to embody the service excellence our brand stands for remains top priority."


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