Are You Being Served?

With the lousy economy having focused consumers' attention on price when they spend their money, it's easy to forget that other factors affect their purchase decisions. But, as a report released last month by American Express makes clear, customer service -- or, often, the conspicuous lack of customer service -- plays a large role in people's choices and attitudes toward companies.EVEN IN THE LOUSY ECONOMY . . .More's the pity, since polling for the report (fielded in April by Echo Research) finds respondents unimpressed with the level of customer service they receive. Though 62 percent said customer service is "very important" (and 32 percent "somewhat important") to them when deciding to do business with a company, just 24 percent agreed that companies "value your business and will go the extra mile for you." Forty-eight percent gave a more middling grade, agreeing that companies "are helpful, but don't do anything extra to keep your business." A sterner one-fourth of those polled think companies "take your business for granted" (21 percent) or "don't seem to care about your business" (5 percent). It scarcely helps matters if the companies themselves have a loftier view of how they treat their clientele. "The key point for companies to keep in mind is that great service doesn't come down to what a company thinks about its performance or its own notions of what its consumers think," says Jim Bush, executive vp, world service at American Express. "It's all about the voice of the customer and what the customer thinks after every interaction.". . . IT IS NOT ALL ABOUT PRICECompanies that think the current importance of price means customer service doesn't much matter are certainly out of sync with consumers. True, 75 percent of respondents identified "value for the price" as a factor that's very important to them when deciding whether to do business with a company. But nearly as many, 65 percent, accorded the same degree of importance to the "overall quality of customer service." Customer service outpolled such considerations as "benefits the product or service provides" (60 percent), "convenience" (44 percent) and "the way the product or service makes me feel" (46 percent). Nor is it the case that the economic downturn has somehow undercut the importance of customer service. Quite the reverse, according to the survey's findings, as the need to get full value for one's constrained spending actually makes good customer service more of a necessity from the consumer's point of view. Sixty-one percent of respondents agreed that, in the current economy, "good customer service is more important." A mere 4 percent said it's "less important," while 34 percent said its importance to them "has stayed the same." Here again, though, many consumers find companies failing to rise to the occasion. Thirty-seven percent agreed that "businesses have increased their focus on providing good customer service," but a majority feel that "businesses pay less attention to providing good customer service" (28 percent) or "have not changed" (27 percent) in their attitudes about it. THE RECESSION'S OPPOSITE EFFECTBeyond consumers' determination to get full value for their money, might the harshness of today's economic environment also make them wish for a virtual hug from companies' customer service? "Yes, we do think consumers are looking for more engagement from the companies they work with, and at American Express we actually talk about the idea of giving customers a hug over the phone," says Bush. "We are increasingly hiring customer-care professionals from nontraditional call-center backgrounds, like hospitality, who know how to build strong and lasting relationships with customers." PROBLEM SOLVING . . .The survey asked respondents to specify what matters to them when they have occasion to interact with a company's customer service. The highest "very important" votes went to "effectiveness/resolution of the issue" and "knowledgeable customer-service representative (84 percent each). Close behind was "courteous customer-service representative" (79 percent), followed by "attentiveness" (74 percent), "human interaction" (73 percent) and "speed of response/efficiency" (72 percent). "Not being put on hold" is very important to 51 percent of respondents. The polling also found 78 percent saying that, when they have a customer-service issue, they're "very interested" in resolving it by "speaking with a 'real' person on the phone." Many fewer (30 percent) said they're very interested in dealing with the matter through a "company Web site or e-mail.". . . SHOULD PAY OFFGood customer service may not come cheap for the companies that provide it, but the survey suggests there's a tangible payoff for the investment. Fifty-eight percent of respondents said they'd be willing to spend more with a company that provides good customer service. On average, those willing to spend more would be game to shell out an extra 9 percent.The more obvious payoff comes in loyalty to the company. Eighty-one percent of the survey's respondents said they're very likely to "give the company repeat business" after a good customer-service experience. A smaller (but still large) number, 52 percent, said they're very likely to "never do business with a company again" after a poor customer-service experience. Moreover, consumers are apt to be vocal about their experience with a company's customer service, whether good or bad. Seventy-five percent "speak positively about the company if asked" following a good customer-service experience with it; 59 percent "speak negatively" about it after a bad experience.WORD OF MOUTH PAYS OFFWhy are good experiences apparently more influential than bad ones in consumers' relationships with a company? "We think it's because the power of a good experience goes a long way," says Bush. "Consumers expect better service in this economy, but as the survey found, most believe that companies either fail to do anything extra to keep their business or even take their business for granted. So when consumers have a good experience, they feel it's worth talking about. Ultimately, this underscores the power of good customer service. Companies have a great opportunity to cultivate strong advocates for their brands if they can get service right." It's evident from the survey that other consumers pay heed to one's tales of personal experience with a company, especially since the Internet now puts a wealth of such material at their disposal. As Bush notes, "The Internet has made service quality more transparent than ever before." Nearly half the respondents said they "always" (10 percent) or "often" (38 percent) consult online postings to learn about a company's customer-service reputation.And while (as noted above) a good experience with customer service is more likely than a bad experience to determine one's own relationship with a company, the survey finds negative online reviews more influential than positive ones. Twelve percent said online postings about a good customer-service experience have "a lot of influence" on their decision to do business with a company, and another 36 percent said such postings exert "some influence." As for postings about a bad customer-service experience, 20 percent said these have "a lot of influence" and 37 percent said they have "some." Bush suggests consumers may be skeptical of positive online comment about a company's performance since "it could originate from the company in question."Though consumers plainly take a bad customer-service experience to heart -- and often amplify it through word of mouth -- this doesn't mean they're utterly unforgiving. Fourteen percent of respondents said they'd allow a company three or more bad customer-service performances before deciding to stop doing business with it; 50 percent said they'd allow two poor showings. But 23 percent said they'd slam the door on a company that disappointed them more than once in its customer service. Companies, consider yourselves warned.

Brand Marketing

Are You Being Served?

Mark Dolliver

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Mark Dolliver