New York, NY –When a customer service issue arises, it’s generally agreed among the C-suite that their company is doing a good job at resolving it. However, new research from Ipsos Loyalty reveals that isn’t exactly true. The study, which covers seven sectors across the U.S., found that, all too often, customers believe they are putting in more effort than companies to get things resolved following a negative complaint or incident.
According to the study, companies are missing the mark when it comes to how they deal with a customer problem. Six in ten (65%) customers felt they had to put a lot of effort in to get an issue resolved. Slightly less (50%) perceive that companies have made little effort to resolve the issue. In six in ten cases, customers think that they have had to put more effort than companies to sort an issue.
“These numbers are sobering,” says Jean-Francois Damais, Deputy Managing Director, Global Client Solutions at Ipsos. “And especially to companies that have invested an enormous amount of time and resources to improving the customer experience. Strikingly in one of three cases companies aren’t even aware of complaints when they do happen. To help address this, companies need to start implementing measures to collect and analyze customer data.”
The study shows that the effort customers make to resolve an issue has a significant impact on their loyalty to a brand. Specifically, when customers think they have put in more effort than companies, they are four times more likely to use the company less or stop using it entirely. They are also about twice more likely to complain to the company.
Not only do incidents have an impact on repeat purchase and behavior, they also have a significant “ripple” effect via social networks and word of mouth. Customers who feel they work harder than companies to solve an issue are over three times more likely to share their negative experience on social media, and 2.5 times more likely to tell friends and family about it. Clearly, one unhappy customer can influence many more.
To help companies improve customer satisfaction, Ipsos has developed a metric — the Customer:Company effort ratio — which measures the perceived customer and company effort following a negative experience or complaint. The ratio is three times more predictive than the Customer Effort score alone to predict a customer’s propensity to use a company again.
Interventions following a customer issue or complaint can be a way for companies to optimize the ratio — and keep their customers coming back. When a company has intervened following a negative experience, the Customer:Company Effort ratio is 1.7 times lower than when a company has done nothing. This lower ratio score leads to a propensity to use the company in the future which is approximately 3.8 times higher.
“The data show that measuring customer effort alone is not enough,” adds Damais. “Companies need to start tracking the Customer:Company Effort ratio as a better indicator of potential churn and bad mouthing. Following a complaint, companies can step in to reduce the pain of customers, with soft actions such as an apology or hard actions such as offering some form of financial compensation. The rewards are doing so will be high.”
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About the Study
These are some of the findings of an Ipsos Loyalty survey conducted in January 2015. For this survey, a sample of 10,061 interviews were conducted via Ipsos online panels among U.S. customers in seven sectors who have experienced a critical incident (i.e., a good or bad experience) in the recent past. Quotas were set to balance the sample on key demographics to ensure that the sample composition is representative of the U.S. population. The margin of error is +/- 1 percentage point at 95% C.I. but can be wider among subsets of the population. All sample surveys may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. Ipsos ranks third in the global research industry.
With offices in 86 countries, Ipsos delivers insightful expertise across six research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.
Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe.
Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,669.5 ($2,218.4 million) in 2014.
Visit ipsos.com to learn more about Ipsos’ offerings and capabilities.
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Director, Marketing Services, North America