Shop Talk

Retailers, consumers and prices

Check Out Line: Retailers need to step up the sucking up to consumers

July 8, 2010

shopping1Check out an American Express survey that shows that quality service matters more than ever, suggesting U.S. retailers may want to start sucking up to recession-wary consumers even more.
    
Sixty-one percent of Americans polled said quality customer service is more important in today’s tough economy and that they will spend an average of 9 percent more when they think a company is providing that. Important points when some analysts and investors worry the economy may be at risk of dipping back into recession.
    
In a disconnect, however, many businesses seem to be missing the message as 28 percent of those polled believe that companies are paying less attention to good service and 27 percent have not changed their attitudes, according to the American Express Global Customer Service Barometer (which sounds like a weather vane for customer service).
 
“Customers want and expect superior service,” AmEx executive vice president Jim Bush said in a statement. “Especially in this tight economic environment, consumers are focused on getting good value for their money. ” 
    
“Many consumers say companies haven’t done enough to improve their approach to service in this economy, and yet it’s clear they’re willing to spend more with those that deliver excellent service – suggesting substantial growth opportunities for businesses that get customer service right,” he added.

Retailers might want to keep all that in mind given the fact that June same-store sales came in slightly below expectations and some analysts see the sector treading water.
    
The survey was conducted in the United States and 11 other countries.
 
In the United States, nine in 10 of those surveyed consider the level of service important when deciding to do business with a company, the survey said. However, only 24 percent believe companies value their business and will go the extra mile to keep it.
    
Contrary to “conventional wisdom,” the survey showed more are inclined to talk about a positive experience (75 percent) than complain about a negative one (59 percent).
    
And consumers said they are far more likely to give a company offering good service repeat business (81 percent) than they are to never do business with a company again after a poor experience (52 percent), according to the poll.
    
However, negative feedback online weighs more heavily as almost half of consumers gather others’ opinions about a company’s customer service reputation and they put greater credence in negative reviews (57 percent) versus positive ones (48 percent), according to AmEx.
    
“Because consumers can broadcast their views so widely online, each and every service interaction a company has with its customers becomes even more crucial,” Bush said. “Developing relationships with customers, listening to them, anticipating their needs, and resolving any issues quickly and courteously can help make the difference.”
    
In fact, 81 percent of Americans have decided never to do business with a company again because of poor customer service in the past, the poll said. Half of those surveyed said it takes two poor service experiences before they stop doing business with a company.
    
However, 86 percent will give a company a second chance after a bad experience if they have historically had great service before, according to the poll.
    
Woe to those who screw the experience up too, as 52 percent of consumers expect something in return after poor service beyond just resolving the problem. Seventy percent want an apology or some form of reimbursement.
    
So retailers, I expect red carpet treatment and a lot of sucking up this recession or you won’t get any of my limited funds!

Also in the basket:

Chrysler launches money-back guarantee

Hain Celestial to name two Icahn nominees to board

Study: Living Near Restaurants Makes You Fat (Wall Street Journal)

Industry Places Bets on back-to-School (WWD, subscription required)

(Reuters photo)

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