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Too Many Companies Aren't Delivering Great Service in Tough Times: AmEx Study

July 08, 2010

One would think that with the economy ever so slowly pulling out of a rut, with customers scarce and spending scarcer, and with social media enabling customers' experiences bad and good to reach the global community that every company would bend over backwards to deliver great service to retain and draw in business.

 
Alas not so according to the just-released American Express Global Customer Service Barometer, a survey conducted in the U.S. and eleven other countries exploring attitudes and preferences toward customer service.
 
Here are some of the key (and disturbing) findings from American customers:
  • A little more than a third (37 percent) believe that companies have increased their focus on providing quality service
  • 27 percent feel businesses have not changed their attitude toward customer service
  • 28 percent say that companies are now paying less attention to good service
  • Only one-quarter (24 percent) believe companies value their business and will go the extra mile to keep it. Most feel businesses can do more to retain their loyalty
  • 48 percent feel companies are helpful but don't do anything extra to keep their business. Worse, 21 percent believe that companies take their business for granted
American customers' experiences translate to their buying decisions. Nine in ten (91 percent) consider the level of customer service important when deciding to do business with a company. 
 
Moreover, negative service experience is an important factor for most Americans: 81 percent have decided never to do business with a company again because of poor customer service in the past. When asked how many poor experiences they allow, half of all Americans (50 percent) reported it takes two poor service experiences before they stop doing business with a company.
 
At the same time, consumers are far more forgiving if a company has earned their trust over time. Almost nine-in-ten consumers (86 percent) report they're willing to give a company a second chance after a bad experience if they've historically experienced great customer service with that company.
 
To earn their way back into customers' good books firms have to work hard and offer more. The survey revealed that 52 percent of them expect something in return after a poor customer service experience, beyond resolving the problem. Most consumers (70 percent) want an apology or some form of reimbursement.
 
There is payoff for firms that get it i.e. supplying top quality service. A majority report that quality customer service is more important to them in today's economic environment (61 percent) and will spend an average of 9 percent more when they believe a company provides excellent service.
 
Also, consumers are far more likely to give a company repeat business after a good service experience (81 percent) than they are to never do business with a company again after a poor experience (52 percent).
 
"Customers want and expect superior service," said Jim Bush, Executive Vice President, World Service. "Especially in this tight economic environment, consumers are focused on getting good value for their money. Many consumers say companies haven't done enough to improve their approach to service in this economy. Yet it's clear they're willing to spend more with those that deliver excellent service -- suggesting substantial growth opportunities for businesses that get customer service right. It's important to see customer service as an investment, not a cost."
 
The AmEx study also underscored the power of word-of-mouth, accelerated by social media, in customers' decisions. Consumers say the three most influential factors when deciding which companies they do business with include personal experience (98 percent), a company's reputation or brand (92 percent) and recommendations from friends and family (88 percent).
 
Contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75 percent) are very likely to speak positively about a company after a good service experience in contrast with 59 percent who are very likely to speak negatively about a company after poor service.
 
Yet in social media it is the negative reactions to watch for. The AmEx report reveals that nearly half (48 percent) of consumers report always or often using an online posting or blog to get others' opinions about a company's customer service reputation. But when consumers go online they're looking for 'watch outs,' saying they put greater credence in negative reviews on blogs and social networking sites than on positive ones (57 percent and 48 percent, respectively).
 
"The Internet has made service quality more transparent than ever before," said Bush. "In the online space, positive recommendations are important, but people often give more weight to the negative. Because consumers can broadcast their views so widely online, each and every service interaction a company has with its customers becomes even more crucial. Developing relationships with customers, listening to them, anticipating their needs, and resolving any issues quickly and courteously can help make the difference."

Brendan B. Read is ContactCenterSolutions's Senior Contributing Editor. To read more of Brendan's articles, please visit his columnist page.

Edited by Alice Straight



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