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2 Impact of Poor Customer Service

2 Impact of Poor Customer Service

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eMaketer (www.emarketer.com) reported that 53% of men and 52% of women

had quit shopping at a retailer they previously shopped at because of a bad experience

with a sales associate.


“A good or bad customer service experience

can affect whether consumers will buy from a

store again.”

eMarketer, 3/18/16


The third annual Customer Service Report, published in 2015 by Corvisa

(www.corvisa.com) reported that 48% of U.S. consumers had stopped doing business

with a company because of negative customer service in the prior 12 months. Among

Millennials, 25% said they wold stop doing business after one negative interaction.

American Express’ Customer Service Barometer reported that 55% of U.S.

adults had walked away from an intended purchase in the prior 12 months because of a

poor customer service experience. Adults estimate that they tell about 24 people about

bad customer service experiences during the course of a year.

41.3 Impact By Segment

A March 2016 survey by Temkin Group (www.temkingroup.com) scored

customer service experience by sector on a 1-to-7 scale (1 = poor; 5 = ok;

7 = excellent) as follows:

• Hotels:


• Auto insurers:


• Banks:


• Credit card issuers:


• Appliance manufacturers:


• Computer manufacturers:


• Auto dealers:


• Airlines:


• Wireless carriers:


• Health plans:


• TV/Internet service providers:


While customer service is important across all consumer sectors, the influence

varies by segment. The following are some industry-specific influences:


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An assessment by Forbes found airline quality ratings (i.e., on-time arrivals,

denied boardings, mishandled baggage, and customer complaints) do not seem to

influence revenue.


“Rude flight attendants, delayed arrivals, stale

meals. Frequent flyers have plenty to gripe

about. But does better customer service actually

sell more tickets? Apparent correlation: zero.”



Drugstores and Pharmacies

The National Pharmacy Study, conducted by J.D. Power and Associates

(www.jdpower.com), found customer service, not price, was most important among

consumers with respect to store loyalty at drugstores and pharmacies.


Customer service ranks low among attributes most important to online shoppers.

In a survey by A.T. Kearney (www.atkearney.com), the ability to find specific products,

free shipping, finding favorite brands, best prices, ease of navigation, site security,

special promotions, free samples, peer reviews, and the availability of new products all

ranked above customer service.

Still, many online shoppers do expect some level of customer service. In a

survey by OneUpWeb (www.oneupweb.com), 32% of Internet users said they expect

live chat. A survey by comScore (www.comscore.com) found 35% of online shoppers

would like online retailers to improve the availability of live customer service.


Emphatica (www.empathica.com) found that 20% of consumers value good

service over good food at fine- and casual-dining establishments.

A Gallup Poll (www.gallup.com) found that the biggest driver of engagement in a

fast-food restaurant is being treated as a valued customer. Warmth of the greeting

ranked second in the survey; taste of food ranked third. Gallup found that a fully

engaged customer will spend $33.90 on fast food per month, 16% more than the

$29.24 spent by a non-engaged consumer.


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41.4 Factors Contributing To Good Customer Service

A survey by Dimensional Research (www.dimensionalresearch.com) asked

consumers about recent interactions with customer service departments of mid-sized

companies. Responses were as follows:

Good Customer Service

• The problem was resolved quickly:


• The person who helped me was nice:


• The problem was resolved in one interaction:


• The outcome was what I was originally hoping for:


Bad Customer Service

• I had to explain my problem to multiple people:

• The person I dealt with was unpleasant:

• My problem took too long to resolve:

• The problem was not resolved:






“Interestingly, [Dimensional Research] found that

among those who said they had had a positive

customer service experience, more said it was

because they received a quick resolution to their

problem, rather than a desirable outcome.”




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42.1 Online Consumer Reviews

Ratings sites – like epinions.com to rate consumer products, yelp.com to rate

restaurants, ratemds.com to rate doctors, tripadvisor.com to rate hotels and

destinations – have become recognized sources consumers rely on for reviews about

products and services.

A survey by ChannelAdvisor (www.channeladvisor.com) found that 92% of

Internet users read product reviews. Among these people, 89% have been influenced

to make a purchase or deterred from purchasing a specific product as the result of

reviews. Only 3% of those who have read reviews say their decisions have been

unaffected by reviews.

Among those who use reviews, about a quarter also post their own opinions.

According to eMarketer (www.emarketer.com), 34.4 million consumers, or 20% of the

U.S. population, share advice online about products or services.

Consumers are increasingly accessing reviews while shopping. Compete

(www.compete.com) reports that 45% of smartphone users have looked at third-party or

consumer reviews of a product while in a store.

In a survey by The Society For New Communications Research (www.sncr.org),

73% of Internet users said customer reviews were important in helping form their

impression of companies.

When asked in a 2015 survey by SheSpeaks (www.shespeaks.com) about the

sources of product information they find credible and trustworthy, responses by female

adult Internet users were as follows:

• Online product reviews or blogs by peer consumers:


• Online product reviews on shopping websites:


• Online product reviews by journalists or analysts:


• Information on product packaging:


• Posts by brands/companies on social media:


• Product advertising or infomercials:


Women are most likely to search for product reviews online if they are shopping

for electronics (77%), appliances (72%) or cosmetics (63%), according to the survey.


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2 Impact of Poor Customer Service

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