In the still-new social-media and mobile era customer care and brand management are more complicated than ever. Billions are being spent by companies annually to manage their reputations with old and new tools. Yet customer service is arguably as bad or worse than ever and US consumers are mad as hell.
That’s according to a new survey data from Arizona State University’s W. P. Carey School of Business. The findings of the survey (wave six) are based on telephone interviews of roughly 1,000 US households (HHs).
The surveys are modeled on one that was originally fielded by the US government in 1976. This year’s survey found that despite all the corporate scheming, spending and alleged concern about the customer experience top US corporations are doing no better than in 1976. In fact, according to several measures, things are considerably worse.
Here are some of the survey’s high-level findings:
- US HHs reporting customer problems increased from 32% in 1976 to 45% in 2011 and again to 50% in 2013
- Customer rage (extreme dissatisfaction) increased from 60% in 2011 to 68% in 2013; TV providers (cable/satellite) is the top rage-inducing industry
- More customer complaints result in no action by the involved companies: 56% of complaining HHs said they “got absolutely nothing” in response
- When companies apologized (as well as providing other free “remedies”) along with monetary compensation “satisfaction doubled from 37% to 74%” (arguing consumers want recognition of their frustrations, not just money)
The survey also reported that customers who were satisfied “or at least pacified” in the wake of communicating a problem told an average of between 10 and 16 people about the problem they experienced. Dissatisfied customers told roughly twice as many (an average of about 28 people).
Another interesting finding: while customers complaining on social networks has increased from 19% (2011) to 35% (2013) people are “still 11 times more likely to complain via phone” than online. However social-networking complaints are “recorded” for all to see and start to show up in search results associated with the brand or product.
While these data come from just one survey I don’t question the accuracy of the findings. In my day-to-day experience I think most companies are doing a pretty bad job of delivering service and responding to customer complaints.
One of the problems is that automation (e.g, IVR) and the internet have been used primarily to reduce customer service costs not to improve service. In addition, widespread offshoring of call centers (also for cost reduction) has contributed to an increase in customer frustration. Cultural and language differences often make communication more challenging (this is true for call centers in the Philippines or India as well).
Some companies have made service the center of their brands (e.g., Nordstrom, Amex, Zappos before Amazon acquired it). However most companies regard customer service as a kind of costly, necessary evil. Yet customer service and the “customer experience” cannot be separated from brand perception as was once the case. This was the theme of Opus Research’s “C3” conference in 2011.
Good service remains expensive to provide — yet it’s cheaper to retain than to acquire customers. The data above argue it’s critical that companies put appropriate emphasis on the customer experience and, when they happen, respond adequately to consumer complaints.