Most companies fail customer service test

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(MoneyWatch) Do you think your customer service is more on point than ever? That the cutting-edge technology you've put in place has brought your customer game to a new level? That your self-help processes make it easier and more frictionless than it's ever been for customers to get their needs met and issues resolved?

Well, there's a good chance you're wrong.

So suggests a recent study of what customers are looking for by American Express. According to the report (which was produced by an independent testing firm and is based on customer surveys), regardless of technology, resources or access to multiple modes of 24/7 communication, the attitude and desires of the customer -- and the things that determine whether she is likely to be happy or disappointed -- haven't changed with the times.

In other words, despite all the hype and noise of modern business, the customer service wheel has not been reinvented; in fact, according to most customers, "old-school" still rules. Among other things:

Most customers still don't think service is good enough, much less getting better: Only about a third of those surveyed believe businesses have increased their focus on customer service. Only 7 percent said that the customer service interactions typically exceed their expectations. And only 23 percent think that companies "value their business and will go the extra mile for them."

Most people will spend more -- significantly more -- for great service: Two-thirds of consumers said they are willing to spend more with a company that provides excellent customer service, and the premium they're willing to pay is nothing to sneeze at: 13 percent more, on average. Three-quarter say they have spent more with a company because of a history of positive customer service experiences. Conversely, over half have decided not to conclude a transaction with a company based on a poor service experience.

Quality personal connections still matter most: For issues like product assistance or returns, about 65 percent of customers prefer live phone or in-person assistance. For even more serious matters, that number jumps to 76 percent. Fewer than 10 percent favor web or email assistance for important matters. Fewer than one in five have used social media for customer service in the past year.

And those live interactions can be make-or-break propositions: A third of consumers cite "a rude or unresponsivecustomer service representative" as the most likely customer service issue to influence them to switch brands or companies. Customers also feel that small businesses generally "provide more personal service and understand both their business and customers better than large companies."

The one rule that has changed is the old adage that unhappy customers will talk about their experiences an order of magnitude more than will happy ones. For sure, the ease and power of technology have made it much easier, and more popular than ever, to complain. But technology has also made it much easier to praise, and that's reflected in the study numbers: on average, customers now tell 15 people about their good experiences and 24 people about their bad ones, while nearly half of consumers always tell others about good customer service experiences.

So the bad performers are getting punished in the court of public opinion more than ever, but the great ones are getting rewarded with more positive -- and far-reaching -- word of mouth.

The bottom line? In the words of David Byrne, "same as it ever was." Customers want access on their terms; fast, effective and personal service when needed; and courtesy, attentiveness and empathetictreatment. And they will pay more and be more loyal to those companies that hit the mark. So don't undermine your business with systems, policies and processes that seem like good ideas on paper, but in fact move you further away from what customers really want... and always have.

  • Michael Hess On Facebook»

    Michael is an entrepreneur who has launched businesses including Skooba Design and Hotdog Yoga Gear travel bag brands, as well as Journeyware Travel Outfitters. Michael sold his company in 2014 and is now focused on writing, speaking and consulting. Learn more about his ventures at www.businesswithclass.com.

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