Customer Service Evaluation News 5/2/12

Social Media Raises the Stakes for Customer Service

Social Media Savvy Consumers Have High Expectations: They’ll Spend More When They Get Good Service and Ditch Companies When They Don’t

NEW YORK, May 02, 2012 (BUSINESS WIRE) — –More Than Eight in Ten of These Consumers Have Bailed on a Purchase Because of a Poor Service Experience Compared to 55% Overall

Americans are growing more frustrated with customer service and businesses are feeling the heat as consumers tell an increasing number of people about both their positive and poor service experiences. The 2012 American Express(R) Global Customer Service Barometer also found that consumers who have used social media for service wield the greatest amount of influence. They tell significantly more people about their service experiences, and say they’d spend 21% more with companies who deliver great service — compared to 13% on average.

The survey, which was conducted in the U.S. and ten other countries, also reveals a sorry state of service in general. Nine in ten of Americans surveyed (93%) say that companies fail to exceed their service expectations. What’s more, one out of two respondents (55%) walked away from an intended purchase in the past year because of a poor customer service experience.

The most popular ways consumers address service inquiries continue to be speaking to a live representative (either on the phone or face-to-face), and through company website or e-mail. That said, one in five consumers (17%) say they’ve used social media at least once in the last year to obtain a customer service response, and this relatively small group of consumers is extremely engaged and vocal.

“Delivering outstanding service creates impassioned advocates and can serve as a powerful marketing weapon for companies,” said Jim Bush, Executive Vice President, World Service, American Express. “For example, consumers who have used social media for service in the last year are willing to pay a 21% premium at companies that provide great service. They also tell three times as many people about positive service experiences compared to the general population. Ultimately, getting service right with these social media savvy consumers can help a business grow.”

People who have used social media for customer service at least once in the last year are willing to spend substantially more (21%) with companies they believe provide great service — in contrast with the general population (13% more) and those who have not used social media for customer service (11% more). They are also far more vocal about service experiences, both good and bad. In addition, more than 80% of these consumers say they’ve bailed on a purchase because of a poor service experience, compared to 55% overall.

                       Service Topic                                Consumers Who                  General       Consumers Who
                                                       Haven't Used   Population    Have Used Social
                                                                    Social Media                                     Media
                                                                         for                                     for Customer
                                                                  Customer Service                                  Service
        ------------------------------------------    ---------------------------------------    ----------    ----------------
        Additional amount consumers are willing to                    11% more                    13% more         21% more
        spend for
        excellent service
        ------------------------------------------    ---------------------------------------    ----------    ----------------
        Have not completed an intended purchase                          49%                         55%              83%
        because of a poor
        customer service
        experience in the past year
        ------------------------------------------    ---------------------------------------    ----------    ----------------
        Number of people consumers will tell about                    9 people                    15 people        42 people
        good customer
        service experiences
        ------------------------------------------    ---------------------------------------    ----------    ----------------
        Number of people consumers will tell about                    17 people                   24 people        53 people
        bad customer
        service experiences
        ------------------------------------------    ---------------------------------------    ----------    ----------------

Consumers who have used social media for customer service do it for a number of reasons. The “Social Top 5” activities for these Americans are:

1) Seeking an actual response from a company about a service issue — 50%

2) Praising a company for a great service experience — 48%

3) Sharing information about your service experience with a wider audience — 47%

4) Venting frustration about a poor service experience — 46%

5) Asking other users how to have better service experiences — 43%

However, these consumers feel companies are getting better at social media service: 60% of this group feels companies have improved their response times through social media over the past year.

Eyes on the Prize

Social media is not the only way people are spreading the word about their customer service experiences. The general population will tell significantly more people about their customer service experiences than in 2011, highlighting the importance for businesses of treating every customer interaction as an opportunity to build customer loyalty and a positive brand image.

— Americans will tell an average of 15 people about positive experiences — up 67% from 9 last year.

— Americans will tell an average of 24 people about poor experiences — up 50% from 16 in 2011.

More than three in five Americans (61%) feel companies have not increased their focus on providing better service, and of this group, 32% feel businesses are paying less attention to providing good customer service — an increase from 2011 (26%).

This dissatisfaction with the state of customer service overall helps ensure companies that deliver great experiences are recognized — and rewarded.

— Two in three Americans (66%) said they would spend an average of 13% more with a company that provides excellent customer service — matching 2011 and up from 9% more in 2010.

“Companies must keep their eyes on the prize when it comes to customer service,” said Mr. Bush. “Outstanding service means exceeding customers’ expectations as you seek to meet their needs. Companies that do this consistently understand that exceptional service is a real competitive advantage.”

Top Customer Service Gripes

Nerves are fraying because of subpar service. More than a third of respondents (35%) report that they have lost their temper with a service professional in the past year. When asked about the top customer service irritants most likely to lead them to switch brands in 2012, eight in ten (79%) Americans cited one of these “Big Four Gripes”:

The Big Four Service Gripes

1) Rudeness: An insensitive or unresponsive customer service representative — 33%

2) Passing the Buck: Being shuffled around with no resolution of the issue — 26%

3) The Waiting Game: Waiting too long to have an issue resolved — 10%

4) Being Boomeranged: Forced to continually follow up on an issue — 10%

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