Center for Services Leadership - Customer Rage
Are you frustrated with the cable company? Do you find yourself angry in the supermarket express lane? Are you dealing with more irate customers yourself? Then you’re not alone, at least according to the first results of the 2004 National Customer Rage Study conducted by the Customer Care Alliance in collaboration with ASU. Customer rage has become more prevalent over time, contend study researchers Dr. Mary Jo Bitner, academic director of the Center for Services Leadership, and Marc Grainer, chairman of Customer Care Measurement and Consulting. The study findings, which were presented during the annual Center for Services Leadership Symposium in early November and also featured by the Wall Street Journal that same week, are the result of extensive multi-industry research and customer surveys.
Complaint handling is one of the top five key drivers of brand loyalty and is the focus of this investigation. In fact, many previous academic studies have found effective complaint handling is essential to satisfaction, drives revenue and in many cases reduces costs. How serious is customer rage, and what impact does it have on your business? Below are some key points Bitner and Grainer made during their presentation:
Rage: common, on the rise, and not so pretty.
Of the people who experienced a problem with a product or service last year, 73 percent of them were extremely or very upset (defined as rage) —that’s an increase of 5 percent over last year’s results. So more people are experiencing rage, but why? Product and service quality is not the reason we have more problems today—in fact, services and products have generally improved. But households simply have more products and services today, and thus more points of contact, increasing our chances that we will have a problem. In fact, compared to a similar complaint study conducted in 1976, today’s customers report an 11 percent rise in problems. To add to the mix, complexity and expectations have increased, presenting more chances for things to run amuck, and for customers to get frustrated. What does this frustration look like? While only 6 percent of those customers cursed or used profanity, nearly 25 percent yelled or raised their voice. You can bet this isn’t good for your company, your employees, or your customers.
Where have all the dollars gone?
Companies spend millions on customer care every year. Call centers and recovery programs receive a lot of hype, but based on the study results, are they doing any good? It’s the proverbial “That depends.” A lot of self-service and automated systems go a long way to prevent your customers from actually getting in touch with you. Think of this in terms of your marketing efforts: “You spend so much money trying to talk to customers, and when they do get in touch with you, you don’t want to talk to them!” said Grainer. And when people did get in touch with companies, the outcomes were less than stellar. Over half of the people who complained felt they got absolutely nothing as a result of their complaint. Of those that did get some recompense, it took many a month of repeated contacts to get there. And by that time, customers perceived they got nothing out of it. According to Grainer, when it gets to that point, “Even though your companies are spending money, customers don’t recognize it.”
Ping-pong with your customers.
Why wouldn’t customers recognize complaint resolution, even if it happened? Because it took customers an average of 4.3 contacts (called ping-ponging) to get their issue resolved. By that time, the aggravation and wasted time nullifies most resolution efforts. The study showed that if a customer had to make three or more contacts, their satisfaction dropped to almost nothing. Even more surprising, what should be the standard—on day resolution—is the exception, not the rule. Only 11 percent of the people got their complaint resolved in less than one day. 19 percent of the people go for a month or more before their problems are resolved.
Story-telling and not-so-fond farewells.
What happens when customers’ complaints turn into rage? We know some yell or curse. Some even sue or demand revenge (11 percent of the people who had serious problems with cookies wanted revenge). But the most common reaction was negative word of mouth: 85 percent of customers shared their story with friends and other people. According to the study, when people are unhappy with how their complaints are handled, they tell 15 people about their experience, whereas those who are satisfied only tell 6 people. And the consequences are well known: “Positive word of mouth may not get you a sale, but negative word of mouth will lose you a sale,” said Grainer. Furthermore, 59 percent decided they wouldn’t do business with that company every again. That’s business you’ll never see again.
Three little words.
Here is perhaps the most surprising outcome of the study—and best of all, it’s something free your company can start doing right now. Customers are reasonable—they feel rage not because they are demanding millions of dollars but because they want to be treated fairly. After getting the product or service problem fixed, the remedies most desired by customers are entirely non-monetary and include explanations, assurances, apologies or chances to vent. “I am sorry,” as it turns out, really does mean a lot. What customers really want is to be treated fairly and with courtesy.
The bottom line? Product excellence plus service supremacy plus effective complaint management equals increased customer satisfaction, brand loyalty, positive word-of-mouth, and decreased customer care cost. If you have a complaint and it is satisfactorily resolved, a high percentage of customers are satisfied. “That’s good news,” noted Bitner, “The bad news is that business is doing a very bad job of delivering complaint resolution. Complaint handling is a very powerful retention tool, but if you do it poorly, you can really damage your brand loyalty.”
How to reduce customer rage in your organization.
- Just say no. How much money do companies spend on customer service and yet put roadblocks to prevent customers from actually reaching them? If this sounds like your company, you may need to re-think how you approach the problem. Many think improved customer satisfaction is about saying “yes” to your customers all the time, but instead, try setting up policies to say “no” easier on the first go round. It’s true that they’re not going to be happy if you say no, but they’ll be less happy if they have to call four times before they get to that no.
- Say you’re sorry. If you give an apology, explanation or chance to vent, you move most people from being dissatisfied to mollified or even satisfied.
- Pick up that phone! Self service technology is a real top dislike in terms of complaint handling. And self-service technology can’t offer an apology. “Customers want to talk to a real person. If they have an option to talk to someone, even if they don’t take it, they will be much more satisfied,” noted Bitner. Many companies set up a call center, VRU, or 800 numbers and think they’re done, but it’s not the end of the story. One tip? Have your CEO call your company every month and test it. You’ll quickly hear if the system’s working or not.
- Make yourself understood. One of the biggest customer problems with outsourcing is when it results to talking with someone they can’t understand, communicate with or who cannot answer their questions.
- Avoid other rage-inducing faux pas. Customers don’t appreciate repeating information over and over as they pass through the system. They also want to see less typos and grammatical errors. Particularly heinous, customers don’t appreciate piggy back selling, especially when you haven’t resolved their initial complaint yet. And coaching answers to a satisfaction survey, especially after a bad experience, is a definite no-no.
Bitner and Grainer argued that poorly handled complaints create negative ROI. A lot of companies would be better off closing down their customer care centers instead of spawning regularly outraged customers. According to the study’s calculations, more than $84B in revenue is at risk as a result of bad complaint resolution. Grainer concludes, “Do it right or don’t do it, because if you do it wrong, it’s going to cost you a lot of money.”