Edward M. Carson Chair in Service Marketing
Who hasn’t experienced the feelings of frustration, disappointment, bewilderment, anger and even rage in reaction to a problem with a product or service?
I know I have.
Recently I tried to cancel (within minutes) a $25 item I had mistakenly ordered online, only to be told “your order is already being prepared for shipment and we may not be able to cancel it.” Knowing that I could waste a lot of time and effort trying to cancel the order, I decided to move on and never return to that particular supplier.
Imagine if that had been a more expensive item? Would I have been so easy going about it? How long would I have persisted and what might have happened in the end?
Based on the Customer Rage Study released last month by the Center for Services Leadership at the W. P. Carey School of Business, 54 percent of those surveyed experienced a serious problem with a product or service in the past year. Most of us complained, yet a full 63 percent felt we got “nothing in return” and worse yet, about two-thirds of us experienced a sense of rage at how the problem was handled. And we withdrew our business from the offending company, vowing never to return.
As customers, employees and managers, we have all experienced customer rage — most likely from both sides of the picture. As customers, it isn’t fun and it costs significant money and time. Upset customers are no fun for employees and managers, either. And, it costs companies money too, in future lost business and employee morale. The study revealed that $202 billion in aggregated sales is at risk as customers withdraw their business from the offending companies.
Small businesses and start-up companies can’t afford to lose business and reputation this way. The good news is that the solutions are pretty straightforward, and if executed well, can build long-term customer loyalty and positive word-of-mouth.
First, consider the customer’s time and figure out ways not to waste it. Time loss is the customer’s biggest gripe when it comes to complaining. Phone trees, long wait times on hold and explaining the same problem over and over are common frustrations that can lead to customer rage. The research shows that it takes an average of four-plus phone calls to get a serious problem with a product or service resolved — if at all. If we can handle customer complaints quickly and preferably on the first call, email or visit, we will be way ahead of most companies. And, the customer is likely to come back.
Beyond respecting their time, the study tells us that these are the things customers want from companies when they complain about a product or service, in order of the percent of customers who want them:
- To be treated with dignity and respect (93 percent).
- Offending company to put itself in my shoes (83 percent).
- An assurance that my problem will not be repeated (81 percent).
- My product repaired/service fixed (80 percent).
- An explanation of why the problem occurred (80 percent).
- To be talked to in everyday language; not a scripted response (79 percent).
- A thank you for my business (76 percent).
- An apology (75 percent).
- Just to express my anger/tell my side of the story (58 percent).
- My money back (57 percent).
- A free product or service in the future (44 percent).
- Financial compensation for my lost time, inconvenience or injury (42 percent).
- Revenge (24 percent).
Relatively few (2 to 32 percent) experience any of these. For example, while 93 percent of customers wanted to be treated with dignity, only 32 percent experienced it.
Notice that most of the remedies are not costly or time-consuming. And the research tells us that when we combine these non-monetary responses (an apology, explanation, treating the customer with dignity) with fixing the problem, satisfaction jumps from 37 percent to 73 percent of customers and brand loyalty increases. But, brand loyalty plummets when we don’t solve the customer’s problem.
Surprisingly, and sadly, not much has improved since 1976, when the first Customer Rage Study was conducted. The good news is that organizations who have figured it out are benefiting from greater customer loyalty and increased business — and you can too, by following the suggestions here.
In this holiday season, let’s try to avoid customer rage — it is good for us as people, and it is good for business!
Mary Jo Bitner is professor of marketing and co-executive director of the Center for Services Leadership at the W. P. Carey School of Business. The center has been engaged in the last five waves of Consumer Rage research. First published in The Arizona Republic, December 21, 2015.