Consumers will pay more for a great customer experience, according to a recent study from RightNow Technologies.
8 in 10 Consumers Will Pay a Premium
Findings from “Customer Experience Report North America” indicate 55% of North American consumers have become a customer of a company because of their reputation for great customer service, and 40% began purchasing from a competitive brand simply because of their reputation for great customer service.
In addition, 85% of consumers say they are willing to pay more than the standard price for a product if a great customer experience came with it. Seventy-six percent would pay 5% more, 55% would pay 10% more, 27% would pay 15% more, 18% would pay 20% more, and 10% would pay a hefty 25% premium to receive a great customer experience.
Great Customer Experience Boosts Revenues
These numbers stack up to make quite an impact. For example, RightNow estimates the US airline industry could make an additional $10.6 billion in revenue this year if they could guarantee a superior customer experience. That is more than five times the predicted deficit for the airline industry this year.
In addition, RightNow estimates the consumer electronics industry could earn an additional $16.5 billion in 2010 revenues by providing a great customer experience. RightNow also estimates that consumers would have spent $87 million more during “CyberMonday” 2009 (the Monday after Thanksgiving, traditionally the busiest e-commerce day of the year) if a great online customer experience were provided.
Customer Service Key to Recommendations
RightNow findings indicate that customer service is the most influential thing a company can do to increase customer advocacy. Fifty-five percent of consumers recommend a company because of its customer service, compared to products at 49% and price at 42%.
Customer service is the most influential thing a company can do to increase customer advocacy. 55% (up from 53% in 2009) of consumers recommend a company because of its customer service, compared to products at 49% and price at 42%.
Conversely, 79% of consumers that had a negative experience with a company told others about it, with 97% using word of mouth as their preferred method to share their experience. However, 92% of consumers said they would go back to a company after a negative experience if they received measures such as an apology, discount, or proof customer service would be better.
Excellent Customer Service Increases Spending
Americans will spend 9% more with companies that provide excellent customer service, according to recent data from American Express. A majority of Americans report that quality customer service is more important to them in today’s economic environment (61%) and will spend an average of 9% more when they believe a company provides excellent service.
About the Data: This survey was conducted online within the US between June 30-July 2, 2010 among 2,217 adults (aged 18 and older) by Harris Interactive on behalf of RightNow Technologies via its Quick Query omnibus product. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Where appropriate, this data were also weighted to reflect the composition of the adult online population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
Source: Marketing Charts