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American Shoppers Spend More for Good Service

Business News Daily
Business News Daily

People are willing to pay more for better service.

Now that American consumers are beginning to shake off the recession, small business owners need to be on top of their customer service game. That's because Americans are placing an even greater premium on quality customer service this year, according to an American Express survey.

The survey found that 70 percent of consumers are willing to spend an average of 13 percent more with companies they believe provide excellent customer service. This figure is up substantially from 2010, when 58 percent of consumers said they would spend an average of 9 percent more with companies that deliver great service.

Despite the greater value Americans are placing on customer service, many businesses don’t seem to be making the grade with consumers, the survey found.

Sixty percent of Americans believe businesses haven’t increased their focus on providing good customer service and, of that group, 26 percent think companies are actually paying less attention to service. The good news is that 81 percent think small businesses do a better job of providing good customer service than large businesses do.

"Getting service right is more than just a nice to do; it's a must-do," said Jim Bush, executive vice president, American Express World Service. "American consumers are willing to spend more with companies that provide outstanding service, and they will also tell, on average, twice as many people about bad service than they are about good service. Ultimately, great service can drive sales and customer loyalty."

The cost of bad service

Americans vote with their wallets when they encounter poor service. The survey found that 78 percent of consumers have abandoned a transaction or not made an intended purchase because of a poor service experience. On the other hand, the promise of better customer service is a draw for shoppers: 59 percent said they would try a new brand or company for a better service experience.

Service can also be the catalyst for both positive and negative word of mouth about your business. Americans say they tell an average of nine people about good experiences, and nearly twice as many (16 people) about poor service experiences.

"There are many who subscribe to the convention that service is a business cost, but our data demonstrates that superior service is an investment that can help drive business growth," Bush said. "Investing in quality talent, and ensuring they have the skills, training and tools that enable them to empathize and actively listen to customers are central to providing consistently excellent service experiences."

Image Credit: jacoblund / Getty Images
Business News Daily
Business News Daily
Whether it's a food truck or a fashion line, a coffee shop or a consulting firm, Business News Daily's goal is to help entrepreneurs build the business of their dreams and to assist anyone working in a small business make smart decisions about products, services and ideas. Our reporting style is simple: We seek insights and advice from experts and then stick to the basics by bringing you concise, actionable information business owners can use to make the daily decisions required to start and grow their businesses.