Customer Rage Reaches Record High: New Study Provides Keys to Keeping Customers Happy
by Diane Berenbaum
American consumers are mad, and they’re not going to take it anymore. According to the recent National Customer Rage Study, the problem of bad customer service keeps growing. Consumers have experienced more problems than ever before—more than 50 million Americans had a problem with a product/service bought within the past year. And, this rage may have cost businesses more than $58 billion in lost future sales.
This study, conducted by the W.P. Carey School of Business in collaboration with Customer Care Management and Consulting (CCMC), highlights why customers are so angry and what this newfound rage means for businesses.
First, the Bad News
Complainant Satisfaction is Down
This is the fifth wave of a study originally conducted by the White House in 1976. But complainant satisfaction has actually gone down two percentage points since that original study, according to Scott Broetzmann of CCMC. The recent survey also found that only 21 percent of respondents who complained were completely satisfied with how their issue was handled.
Customers are also particularly sensitive about the time lost due to these issues; even more than financial losses, physical injury or other damages. The study found they lost an average of six hours as a result of their most serious issue, a 50% increase since earlier studies.
Another major reason for low satisfaction is “ping-ponging,” according to Professor Mary Jo Bitner, executive director at the Center for Services Leadership at the W.P. Carey School of Business. “They call a company, and they have to call back, and then they have to explain the problem to someone else, and they keep going on and on and pretty soon they’re very, very dissatisfied and they still don’t have their problem resolved,” explained Bitner.
Number of Complaints is Up
More disturbing news is that the number of respondents experiencing a problem has risen from 32 percent to 45 percent. Plus, 60 percent of those unhappy customers are not just unhappy; they are extremely upset or enraged.
Particularly disturbing was the fact that, when customer do complain about a serious problem, they rarely get what they want—47% felt that they got absolutely nothing when they complained about something they considered the most severe offense.
And, Bitner noted that “ineffective customer-complaint handling may be even worse than not responding to complaints at all.” Ineffective call-handling can mean more customer callbacks to set things right. The study showed that the more calls it takes to resolve a complaint, the madder customers get. If a problem was resolved in one contact, then 49 percent were satisfied. If customers needed to make three or more calls, then only 11 percent were ultimately satisfied. In 2011, the average number of contacts needed to handle a complaint was 4.4. And, 21 percent of respondents had to contact the company seven times or more.
No wonder customers were enraged.
There’s a High Cost of Poor Complaint Handling
Once enraged, dissatisfied customers tell others. “People are not afraid to talk about their issues with companies”, commented Grainger. “A whopping 88 percent of those in the new study say they also shared their story with friends and others. That’s even higher than the 82 percent who complained directly to the companies responsible.” And these convincing stories can affect their friends’ purchases (and their
friends’ purchases), which will certainly affect the companies’ bottom lines.
Grainer added, “…unless companies significantly improve their complaint handling practices—and the data show they haven’t improved in the last 35 years—we’re talking about something that can have a big impact on corporate profits.”
This study clearly proved that most companies are still handling complaints poorly. And, handling complaints poorly leads to fewer customer referrals, lower brand loyalty and higher costs… and ultimately lower overall ROI too.
So, What’s the Good News?
Positive Postings on the Web
As you might expect, more people are using the web and social media outlets to share their views. But, you might be surprised to learn that “more people posted good experiences to the Web than those who posted bad experiences,” according to Broetzman. And, “contrary to conventional wisdom, respondents felt, by a margin of two-to-one, that good-experience posts had more impact on their buying decisions than negative postings.”
We all know the potential for sharing stories via social media is great—more than 11 times greater than word of mouth. But, social media doesn’t usually work as well. The study revealed that most people are primarily influenced by traditional sources such as personal experiences, newspaper articles and TV stories, rather than Web postings.
Customer Expectations Have Declined
Customers have gotten used to mediocre service over the years. They’ve noticed that it hasn’t gotten any better, despite their protestations, so they don’t really expect much from service providers these days. “In most industries, if you’re mediocre—and I mean mediocre—that’s all you have to be to be number one,” noted Grainger. “Expectations are so low, especially in service industries, that if you do even a half decent job, you exceed expectations.”
How to Keep Customers Happy: Four Key Strategies
1. Treat them with Dignity and Courtesy
Most of the remedies desired by customers are entirely non-monetary. Of the top 10 remedies that customers wanted, the number one choice was “to be treated with dignity.” Ninety percent said this was what they really wanted, yet only 40 percent said they got it.
One simple way to treat others with dignity is often forgotten or overlooked; that is, simply saying “Thank you.” Seventy percent of the complaining customers surveyed wanted to hear “A thank you for my business,” but only 32 percent got one.
2. Educate and/or Provide Explanations
Seventy-three percent of the respondents in this study just wanted “an explanation of why the problem occurred;” a respectful response. But, only 23 percent got that. Often customers just need to know the “why” behind the update, or other options when appropriate.
Jon Anton’s research also showed that “advice” was one of the top qualities most desired by customers today—for when you share this type of information, customers will view the relationship as more of a partnership. And, this means they will be more likely to trust you with their business over the long term.
3. Apologize When Appropriate
The study revealed that many customers simply want an apology. An apology is a sincere expression of regret for having caused trouble for someone. It helps assure the customer that you value them and their business, and it can help restore the relationship with that customer.
Grainer noted “You don’t have to accept blame, but saying 'I'm sorry' can go a long way to turning an enraged complainant into a satisfied one.” And, when companies apologize, customer satisfaction goes up.
4. Satisfy in a Timely Manner; Ideally in One Contact
Resolving issues quickly is a strong satisfaction variable. For those customers who had their problem resolved in just one contact, nearly 50% were satisfied. The satisfaction rate drops dramatically after that benchmark.
And, if organizations can resolve issues in the first call, there is a direct impact on customer satisfaction. According to the Service Quality Measurement Group, for every 1% improvement in first call resolution (FCR), you get a 1% improvement in customer satisfaction. Equally important, the absence of FCR is a huge driver of dissatisfaction.
When you provide complainants with great service, you reap big rewards. Since its inception, this study has shown that the ROI that comes from great customer service is higher than any kind of advertising or marketing a company would do. “Satisfied complainants are often more loyal than customers who never had complaints. And they tell other people about it.” noted Marc Grainer, chairman of CCMC.
Satisfying complainants in a timely manner leads to higher brand loyalty and lower costs, as well as higher overall ROI. And, it means there will be a whole lot less for customers to complain about.
Diane Berenbaum is a long-time contributor and former editor of the MAGIC Service Newsletter. She has more than twenty-five years of experience as a consultant, coach, and facilitator. Diane is the co-author of How to Talk to Customers: Create a Great Impression Every Time with MAGIC® .