Global Customers Demand and Expect More: New Research Reveals How to Increase Retention and Loyalty

by Diane Berenbaum

In today's economic environment, customers are being more cautious and selective with their spending dollars. That is certainly to be expected. But, the recently released American Express Global Customer Barometer (July 2010) provides noteworthy statistics that suggest companies need to shift some of their practices to win and keep customers. This study explored attitudes and preferences toward service in the U.S. and 11 other countries.

Companies are Not Doing Enough to Improve Service

According to Jim Bush, executive vice president of World Service at American Express, customers want and expect superior service: nine in ten Americans (91%) consider the level of service important when deciding to do business with a company. And, 61% report that quality customer service is even more important to them in today’s environment.

But, many consumers say companies haven’t done enough to improve service and retain their loyalty…and they feel they’ve been taken for granted:

  • 28% say that companies are now paying less attention to quality service

  • 48% feel companies are helpful but don’t do anything extra to keep their business

  • 21% believe that companies take their business for granted

Sadly, only 24% believe companies value their business and will go the extra mile to keep it.

The Good News about Good Service

Businesses missing the boat on service are also missing the opportunity to increase their sales and reputation:

  • A majority of Americans reported that they will spend an average of 9% more when they believe a company provides excellent service.

    This phenomenon is true globally as well. Consumers around the world say they will increase the percentage spent with companies that provide excellent service:

    India:  11%
    Japan:  10%
    Italy:  9%
    Mexico, Spain, France and Australia: 8%
    Canada, UK, Germany and Netherlands: 7%
  • Great service experiences have a direct impact on future spending decisions: 81% will give repeat business to a company after a positive experience.
  • Customers are more likely to share a positive experience than complain about a negative one: 75% are very likely to speak positively about a company after a good experience, compared with 59% who are very likely to speak negatively after a poor experience.
  • Consumers in the U.S., Canada, and Mexico are most likely to find 'courteous' and 'knowledgeable' customer service representatives to be important (very/somewhat), along with the 'representative they’re dealing with.'
  • 'Courteous' representatives are also more important among consumers in Germany, the U.K. and Australia.

The Bad News about Bad Service…But You Can Mitigate the Impact

"The internet has made service quality more transparent than ever," notes Mr. Bush. "In the online space, positive recommendations are important, but people often give more weight to the negative."

At least half of consumers across all markets find online postings about poor customer service experiences to be influential. Consumers in India, Japan (80% each), Italy (70%) and Mexico (66%) are more likely to find these postings to be influential compared with consumers in the other markets. Consumers in the Netherlands (53%) and Canada (50%) are the least likely to find these postings to be influential.

81% have decided never to do business with a company after a bad service experience. How many bad experiences does it take before they turn to a competitor? Half of all Americans (50%) said they will stop doing business after two poor experiences.

But, if your organization has earned your customers' trust, then the numbers switch to your favor. Almost 90% say they will give a company a second chance after a bad experience, if they have a history of great experiences with that organization.
The data clearly reinforces the fact that each and every service interaction is crucial…now more than ever. According to Bush, "Developing relationships with customers, listening to them, anticipating their needs and resolving issues quickly and courteously" will make the difference.

All the more reason to rejuvenate your service focus and see customer service as an investment, not a cost.  Provide associates with the training, coaching and mentoring they need to deliver a consistently meaningful and memorable customer experience. Investing in service and your associates truly pays off.

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 April 13 and April 20, 2010. 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., Spain, the Netherlands, Australia, India and Japan

Diane Berenbaum is a long-time contributor and former editor of the MAGIC Service Newsletter. She has more than twenty-five years of experience as a consultant, coach, and facilitator. Diane is the co-author of How to Talk to Customers: Create a Great Impression Every Time with MAGIC® .
Before and After
Before and After
Just one "tragic" contact can influence your customers' perception of your company (and their buying decisions). Listen to the difference MAGIC® can make.