When that brand-new television breaks or the Internet goes out, consumers have no choice but to call customer service in search of a solution – an experience that often includes automated operators, long hold times and other inconveniences.
Arizona State University’s newly released 2017 Customer Rage Survey found that these nightmare scenarios do not just irk consumers but also cost businesses hundreds of billions of dollars.
The study – the eighth Customer Rage Survey since the White House first conducted it in 1976 – found that businesses have put $313 billion in future sales at risk due to ineffective customer-service programs that leave a majority of consumers unsatisfied.
Consumers faced the most problems with cable/satellite television services, followed by computer and telephone services. Big companies accounted for the vast majority of these issues over small businesses, government agencies and non-profit organizations.
The survey found that 69 million families experienced at least one issue over the past year and 56 percent of people reported customer problems in 2017. That marks a 2 percent increase over 2015 and 24 percent increase over the original White House study.
“I think that there are a number of things behind that uptick (between the original study and 2017),” Mary Jo Bitner said. “Some of the things are that the context that we live in today and the products and services have changed.”
“There are a lot of complex products and services and things that can go wrong. People’s expectations are higher,” she added.
Bitner is co-executive director of the Center for Services Leadership at ASU’s W.P. Carey School of Business, which conducted the study with Customer Care Measurement & Consulting. Confirmit and Bernett also participated in the study.
Unlike in the original study, recent surveys found that the way companies respond to these complaints affects whether customers will use those products or services in the future.
In 1976, the survey found that there was a 9 percent increase in brand loyalty among complainants over non-complainants even when the complaint was not satisfied.
“What (researchers) found (in 1976) was as long as you listen to people and let them complain, you were going to get an increase in satisfaction and a likelihood to return again,” Bitner said. “We don’t see that at all in 2017.”
In fact, Rage Surveys from the 2000s found that brand loyalty decreased 10 to 12 percent as a result of dissatisfied complainants.
Unsurprisingly, customer satisfaction has a direct correlation to whether consumers intend to use businesses or services in the future.
Only 21 percent of those surveyed in 2017 indicated they were satisfied by the action taken in response to their complaints. Of that group, 68 percent had an intention to purchase from the business again.
That intention to repurchase drops dramatically – to just 11 percent – when customers indicated they were somewhat satisfied. The intention to repurchase is nearly nonexistent in customers that were dissatisfied with the action taken, falling to 3 percent.
This is a serious issue for businesses, as dissatisfied or somewhat-satisfied consumers accounted for 79 percent of those surveyed.
This lack of satisfaction could be related to the disconnect between what customers wanted to receive and what they actually got. In 2017, 51 percent of complainants felt they received nothing for their complaint.
For example, 87 percent of respondents indicated they “wanted to be treated with dignity” but only 37 percent reported that they actually received that treatment. Similarly, 76 percent indicated they wanted their product or service fixed but only 29 percent reported that the issue was actually fixed.
Overall, 73 percent of customers reported they were most satisfied when they received a combination of monetary and non-monetary remedies for their complaint. That is much higher than the percentage of customers satisfied with only a monetary remedy (41 percent) or only a non-monetary remedy (23 percent).
Typically, consumers – even young people – still use the telephone to make complaints, with 70 percent of respondents making complaints over the phone versus 12 percent using the Internet.
“People still want their problem solved and they don’t feel necessarily that expressing it online is the best way of getting that solved,” Bitner said.
Customers indicated that several phone-related activities contributed to their dissatisfaction, including no option to speak to a live person, attempts to sell complainants additional products and having to repeat information.
Businesses still need to pay attention to consumers’ online activity because of its reach. Posts on social networking websites spread negative word of mouth to 825 people on average compared to 12 people under traditional word of mouth.
The news was not all bad for companies, though. The survey did find that the number of households experiencing “customer rage” fell to 56 percent in 2017, down from 66 percent in 2015. Customer rage refers to extreme anger.
However, that decrease in customer rage did not extend to other negative emotions associated with customer service as 91 percent of people experienced frustration, 84 percent felt disappointment and 62 percent experienced anger.
“The bad news about that (decrease in customer rage) is the other emotions are equally important,” Bitner said.
She also stated researchers have not pinpointed a definitive reason for the decrease in rage.
Bitner suggested that companies can improve customer service by increasing satisfactory remedies and limiting the amount of time it takes customers receive a satisfactory resolution to their complaints.
In the 2017 survey, just 25 percent of consumers said their issue was resolved on first contact. That number is up from just 11 percent in 2015. The average number of contacts required to resolve a complaint in 2017 was 4.1, a number that has held relatively steady since 2003.
“I think a big issue for a company is to figure out how they can handle a complaint on the first call,” Bitner said. “I think that is a responsible for improving (customer complaint handling).”
The 2017 Customer Rage Survey included a telephone survey interviewing a representative household sample of 1,000 respondents.