New Customer-Rage Study

November 2, 2011

New Customer-Rage Study

Fewer Consumers Satisfied Than Ever Before

TEMPE, Ariz. — A new customer-rage study shows fewer American consumers than ever are satisfied with the products and services we buy. The national phone survey of 1,000 households gives an in-depth look at our dissatisfaction, the bad customer service received when we complain, and the Web’s new role in venting our anger.

Based on the results, the researchers believe more than 50 million Americans had a problem with a product or service bought within the past year, and more than $58 billion in transactions may be at risk for the businesses that sold them.

“The good news is that, if a company handles your complaint well, it will enhance your brand loyalty and can even add to its profitability,” explains Professor Mary Jo Bitner, executive director of the Center for Services Leadership at the W. P. Carey School of Business at Arizona State University, which was involved in designing the survey. “The bad news is that ineffective customer-complaint handling may be even worse than not responding to the complaints at all.”

In the new independent study, completed in September, researchers Marc Grainer and Scott Broetzmann of Customer Care Measurement and Consulting (CCMC) worked with the Center for Services Leadership. They found the problem of bad customer service keeps growing. The 2011 survey is based on one originally conducted by the White House in 1976, and this is now the fifth wave of the study, providing an easy comparison of how American customers are being treated.

“Most companies have adopted many of the correct complaint-handling policies, but have failed in the execution of those practices,” says Broetzmann. “Complainant satisfaction has actually gone down 2 percentage points since the original White House study in 1976. Also, 90 percent of those complaining in the latest survey say they just wanted to be treated with dignity, but only 40 percent felt they got that.”

In the original White House study, 32 percent of the respondents reported experiencing a product or service problem within the past 12 months. In the subsequent studies done in 2003 through 2011, the number rose to 40 percent. In the newest study, problems hit 45 percent.

The nature of the complaints over the years has changed somewhat. For example, the products providing the most annoying problems have changed from automobiles to cable/satellite TV. Also, even though the number of angry consumers is still high, the level of their rage has dropped. In the 2003 to 2011 studies, 68 percent of the respondents said they were “extremely” or “very upset” with their consumer problems. That fell to 60 percent in the new study.

Consistently over the years, the biggest peeve of those responding is that they lose time in dealing with the problem, even more upsetting than the monetary or other wrongs suffered. The situation is especially aggravated when they are “ping-ponged” from one person to another with their complaints. Amazingly, an average of 4.4 contacts were needed to resolve complaints in the new study. Despite this, 61 percent of the complainants say the time spent complaining was worthwhile, possibly because they had the opportunity to vent.

“People are not afraid to talk about their issues with companies,” says Grainer. “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.”

For the first time, extensive questions about the Web were added to the customer-rage study. Twenty-seven percent of those who complained posted the problem to the Internet. Almost all of those who posted on some type of social networking site – 96 percent – did so on Facebook. Most say they did it to either ensure others didn’t have the same bad experience or to vent their frustration.

“It may surprise you to learn that more people posted good experiences to the Web than those who posted bad experiences,” says Broetzmann. “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.”

The study also shows that even though the potential for spreading stories via social networking is more than 11 times greater than traditional word of mouth, it may not work as well. Most people say they’re primarily influenced in purchasing decisions by traditional sources of information, such as personal experiences, newspaper articles and stories seen on television, not Web postings.

In the end, most of this consumer rage may be a waste of time. In the new survey, 47 percent of complainants say they felt they got nothing, and even those who got something felt it wasn’t much.

The study results will be discussed publicly this week in Phoenix at the annual Compete through Service Symposium hosted by the Center for Services Leadership. The center was formed in 1985 as a response to the unique challenges that companies face in the services arena. More information about the center’s work, big-name member firms and the symposium can be found at www.wpcarey.asu.edu/csl.

W. P. CAREY SCHOOL OF BUSINESS
The W. P. Carey School of Business at Arizona State University is one of the top-ranked and largest business schools in the United States. The school is internationally regarded for its research productivity and its distinguished faculty members, including a Nobel Prize winner. Students come from 99 countries and include 60 National Merit Scholars. For more information, please visit wpcarey.asu.edu and http://knowledge.wpcarey.asu.edu.