What does bad customer service cost

Study: Bad service costs companies a lot of money

Two out of five German consumers are very dissatisfied with the service provided by companies. Around 80 percent have already abandoned a purchase because of poor service. If, on the other hand, companies offer good service, they can count on loyal customers who also spend more money when shopping.

These are the results of the American Express Global Customer Service Barometer, a representative survey of 1,000 people in 10 countries.


Companies meet customer service expectations, but do not exceed them

In the perception of consumers, the services provided by German companies have deteriorated dramatically: 39 percent of Germans state that the companies do not meet their service expectations. In 2010, only 28 percent of German consumers were dissatisfied with the service. More than half of German customers say that their customer service expectations are met (55%), but only 2 percent say that the service even exceeded their expectations. For comparison: In India, 10 percent of customers say that their expectations have been exceeded and 6 percent say so in the USA.


Customers spend more money with good service

With the exception of France, over half of consumers have spent more money with a company because they have experienced good customer service in the past. For 59 percent of German customers, good service led to increased purchases.

German consumers would spend 8% more money on excellent service. They give as reasons:

Excellent service is worth paying more (29%)

Companies that offer excellent service win me as a customer (25%)

I generally value very good service (18%)

I refuse to buy from companies that offer poor customer service (23%)

· I only do business with companies that offer excellent service (5%).


Which methods should be used to solve customer problems?

If there are problems, most German consumers want to speak to a real person on the phone to solve the problem (80%), or to receive help by email (73%). In comparison, personal conversations are least important to Germans of all the nations surveyed (57%).

Good customer service has a strong impact on brand perception. A good service experience has the greatest impact on perception for 46 percent of Germans, while a bad experience has the greatest impact on perception for 43 percent of Germans. Only 7 percent state that the service has no impact on brand perception.

If a company offers poor service, it must expect customers to switch to other providers. Because in order to get better customer service, many consumers would definitely try out a new brand (62%) and make other sacrifices: 26 percent of those surveyed would take another journey, and 12 percent would forego other convenience.


Bad service costs companies a lot of money

Across all markets, customers reported not completing a transaction or intended purchase because of poor customer service. This already led to 81 percent of Germans abandoning their purchases. Online customers are not that critical: Here, “only” 44 percent of German users abandoned a purchase because they were not satisfied with the service.

Conversely, companies can hope for loyal customers with good service. If their expectations are met, 91 percent of Germans say that they will most likely shop again or use services there

People talk about good service - even more about bad service

It is interesting that, compared to other countries, Germans speak less often about their experiences with other people, be it good or bad. There is a big difference in passing on good service experiences: only 26 percent of Germans regularly pass on positive experiences. If Americans had a good experience, 48 percent will definitely pass it on. Bad service experiences, on the other hand, are passed on much more often than good ones: 47 percent of Germans regularly tell other people about bad experiences.

On the other hand, the Germans can control themselves better than other countries and do not lose their composure with a customer advisor so quickly. This has already happened to 37 percent of Germans. In France it is 75 percent and in Mexico it is even 86%.


Small businesses provide better customer service than large businesses

The majority of customers in almost all surveyed countries say that small businesses offer better customer service than large companies. 35 percent of Germans are of the opinion that it is much better, 45 percent see it as a little better and only 16 percent of Germans see no difference.

One more funny result at the end: Italy is the only country where you would rather spend a vacation with your in-laws than talk to a customer service representative.

On behalf of American Express, Echo Research surveyed 1,000 consumers aged 18 and over in Germany, Australia, Canada, France, India, Italy, Mexico, the Netherlands, Great Britain and the USA on the subject of service between February 18 and March 2, 2011 . The survey was carried out online.

Categories EconomyTags American Express Global Customer Service Barometer, CRM, customer care, service quality