You’d think in a sagging economy, retailers and service providers would take extra steps to secure the buying comfort of customers, who have other options.
Consumer sentiment is down as it is, even discounting toxic customer service experiences. According to the Reuters/University of Michigan Consumer Sentiment Index, consumers aren't exactly thrilled with current economic conditions.
“The notable weakness was in the consumer's assessment of current (economic) conditions which, at 80.6, fell 5.4 points in an unusually steep decline,” notes the Index.
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Businesses might want to tape the term “current economic conditions” to their wall, if not their foreheads. That’s because consumers, given their sagging financial conditions, aren’t inclined to buy unless they feel it’s necessary. And when they do, the buying experience better be good.
Unfortunately, consumers are increasingly convinced they can’t get that positive customer relationship experience. That’s the takeaway from an American Express Global Customer Service Barometer survey released Wednesday.
The Amex survey concludes a staggering 90% of consumers surveyed said businesses “failed to exceed their service expectations”. Worse for companies’ bottom lines, 55% of consumers say they “ditched” a purchase over bad customer service at least once in the past year.
Interestingly, consumers have found their own way to deal with -- even fight back against -- poor customer service. Amex says they’ve turned to social media, i.e. Twitter and Facebook, and those who do are “wielding the most influence” over businesses.
Why use social networking to deal with customer service? Amex has a few answers:
- Social media tells significantly more people about their service experiences than the average consumer.
- Consumer who use social media spend 21% more with companies who deliver great service (compared to 13% on average).
- Over 80% of social media consumers have bailed on a purchase because of a poor service experience (compared to 55% overall).
American Express says that, while consumers still mainly use the phone or email to interact with customer service specialists, 17% of consumers surveyed have used social media to interact with companies. That 17%, incidentally, are considered by Amex to be “extremely engaged and vocal” as consumers.
Businesses would do well to pay closer attention to customers who use social media. “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,” explains Jim Bush, executive vice president of world service for American Express. “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.”
Consumers can use social media in myriad ways, even to recommend a company to family and friends. Amex says that 47% of people surveyed have done just in the past year, although roughly the same amount (46%) will “vent” about a frustrating buying experience, too.
The message to companies is clear as a bell. Businesses who want to record their bottom lines in black ink rather than red had better get a grip on social media – before it gets a vise-like grip on them.