Consumers Spend More for Good Service

Americans are placing an even greater premium on quality customer service according to a study by American Express By: Monica Poling
Consumers spend more for good service // © 2011 TravelAge West
Consumers spend more for good service // © 2011 TravelAge West

Average Percentage More That Consumers Are Willing to Spend

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

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 temper with a customer service representative.

Percentage of Consumers Who Have Lost Their Temper with a Customer Service Professional

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

Americans are placing an even greater premium on quality customer service this year, according to the American Express Global Customer Service Barometer, a survey exploring attitudes and preferences toward customer service.

Conducted in the U.S. and nine other countries, the survey found seven in 10 Americans (70 percent) 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 six in 10 Americans (58 percent) said they would spend an average of 9 percent more with companies that deliver great 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 do about good service. Ultimately, great service can drive sales and customer loyalty.”

Service Can Make or Break Brands
Americans vote with their wallets when they encounter subpar service; 78 percent of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience. On the other hand, the promise of better customer service is a draw for shoppers: three in five Americans (59 percent) would try a new brand or company for a better service experience.

Despite the greater value Americans are placing on customer service, businesses don't seem to be making the grade with consumers.
·         Six in 10 Americans (60 percent) 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.

·         Two in five (42 percent) said companies are helpful but don’t do anything extra to keep their business.
•             One in five (22 percent) consumers think companies take their business for granted.

A notable bright spot are small businesses. Four in five Americans (81 percent) agree that smaller companies place a greater emphasis on customer service than large businesses.

The Multiplier Effect
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 — making every individual service interaction important for businesses.

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.

Poor Service Leaves Customers Seeing Red...

Poor service experiences leave many Americans hot under the collar. More than half of respondents (56 percent) admit to having lost their temper with a customer service professional.
·         Consumers age 30-49 are the most frequently angered (61 percent).

·         Young people are more patient, with more than half of those age 18-29 saying they have never lost their temper with a service professional (54 percent).

Once they are angry, watch out. Americans who have lost their temper due to a poor service experience 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: two in five Americans have threatened to switch to a competitor (39 percent).

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).

Consumers Worldwide Value Service -- But Most Feel Businesses Aren't Measuring Up
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.

About the American Express Global Customer Service Barometer
The American Express Global Customer Service Barometer research was completed online among a random sample of 1,000 U.S. consumers aged 18+. Interviewing was conducted by Echo Research between February 2-10, 2011. Overall, the results have a margin of error of +/- 3.1% at the 95 percent level of confidence. The same survey methodology was used in Canada, Mexico, France, Germany, Italy, the U.K., the Netherlands, Australia, and India.

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