New research shows that:
• 55% of consumers would pay extra to guarantee better service
• 52% have experienced poor service from big name retailer in the last year
• Ill-informed staff is biggest customer service bugbear
• Young consumers are more demanding, with one in ten 25-34 year olds willing to pay more than 20% extra for improved service
Frustrated by ill-informed staff and having to repeat information numerous times, British consumers aren't getting the customer service they expect, but most will pay extra if it guarantees a better experience. As we become a nation of 'demandistas' - demanding more, faster - organisations must urgently adapt to meet these needs, or risk losing business.
This is according to new research out today that reveals over half of British consumers (52%) have had at least one experience of poor customer service from a household name company within the last year. Of these, four out of five (81%) have had an experience of poor service within the last six months. Yet most consumers would pay more for improved service, with well over half (55%) saying they would part with extra cash for a product if it guaranteed a better level of customer service.
Young consumers are most demanding, with 10% of 25-34 year olds willing to pay more than 20% extra for improved service. Organisations able to differentiate on service will be the winners as complacent retailers go out of business, warns Strategix, the business management software company that commissioned the research.
"Most of us have an example of terrible customer service that we've told our friends about," says Peter Lusty, chief executive of Strategix. “Organisations must not underestimate the damage this can do to their business and need to realise that in today's 'now economy' customers expect more, want things faster and will not tolerate a second rate service. Even household name companies, who should have the resources to get the basics right, have failed the majority of consumers and this indicates that customer-facing industries aren't keeping pace with shifting expectations. Only companies who can meet or exceed customer expectations on service are going to win in this new environment."
The research found that the biggest customer service bugbear for consumers is ill-informed staff in an organisation, with nearly one third (29%) giving this as their primary irritation. Having to repeat information each time they call an organisation was cited by 17%, illustrating the inability of many companies to hold a single view of their relationship with their customers.
Peter Lusty comments: "Consumers dislike being the only one that remembers the history of their dealings with an organisation and are increasingly reluctant to be the glue that holds the relationship together. Customer service ultimately comes down to getting the right product or information to the right person or place at the right time. Getting these basics right depends on using IT systems to keep staff, whether in the call centre or on the shop floor, well informed and up to date. Ironically, it's only by staying at the cutting edge of technology that companies can meet traditional expectations of customer service."
Have you had at least one experience of poor customer service from a household name company within the last year? Did you receive this poor customer service within the last 6 months?
• 52% of customers have had at least one experience of poor service in the last year
• Of these, 81% had an experience in the last 6 months
Do you agree or disagree with the statement: I would be prepared to pay more for a product if I could guarantee a better and/or faster level of service?
• 42% would pay up to 10% more for a product if it guaranteed a better/faster service
• 8% would pay up to 20% more
• 5% would pay more than 20% extra - this rises to 10% of 25-34 year olds
• In other words, 55% would pay more for a product if it guaranteed a better/faster service
• This rises to 66% of 25-34 year olds who would pay more and 65% of 35-44 year olds
• However, willingness to pay more decreases with age with only 39% of 55-64 years olds willing to pay more
• Regional variations:
• Customers in the North of England are least prepared to pay extra. 56% of those in the North East, 50% of those in the North West and 49% in the North say they wouldn't pay more for better service. This is compared to a national average of 45%
• Customers in Scotland and the Midlands are most prepared to pay extra. 60% of those in Scotland and 61% of those in the Midlands say they would pay more for better service. This is compared to a national average of 55%
• Customers in the South and Greater London are prepared to pay the most for better service. 9% of those in the South and 14% of those in Greater London will pay more than 20% extra for a product if it guaranteed a better/faster level of service
When purchasing something over £100 in value, which of the following are your primary and secondary decision making factors? (Options provided: Product availability; Brand; Price; Customer Service; Value added services; Delivery time; Personal touch; None of the above)
• Price is the most popular primary purchasing decision-making factor (37%), then brand (19%), then product availability (12%)
• Regional variations: Respondents in the North West of England are more concerned with customer service than respondents elsewhere, with 17% citing customer service as an important secondary decision making factor, compared with the 9% national average
• 21% of men said product availability was their secondary decision-making factor
Which of the following is your main customer service bugbear? (Options provided : Vague delivery times; Ill informed staff; Slow response to queries; Having to repeat information each time you call an organisation; Lack of ownership of any problems – blaming each other; No single point of contact; Lack of flexibility to meet your needs; Lack of communication with you; None of the above)
• Nearly one third (29%) cite ill-informed staff as their primary customer service bugbear
• This is followed by the need to repeat details on calling an organisation (17%)
• Both factors point to poor information held by the organisation (46% combined)
• The third biggest bugbear is lack of ownership of any problems (12%)
About the survey
The research was conducted in May 2004 on behalf of Strategix, by research specialists TNS. A total of 884 British adults aged 25-64 were surveyed.
Strategix is a leading European software house, dedicated to the development and rapid deployment of supply chain software. We focus on the wholesale and retail distribution, logistics and service sectors where our software maximizes supply chain efficiency and accelerates customer service. Our systems are designed for reliability, availability and performance. Our customers enjoy a rapid return on their investment and genuine competitive advantage.
Focused on key growth sectors which range from high technology to household and building products, Strategix numbers businesses such as Azlan, Avnet, Dimension Data, Eurodis Electron, Fired Earth, Fuller Smith & Turner, Mission Symphonix, and Virgin Mobile among its customers.
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