Customers will pay 7% more for extra service

September 20, 2010
Sept. 20, 2010 - A majority of Canadians report that quality customer service is more important to them in today's economic environment (58%) and will spend an average of seven per cent more when they believe a company provides excellent service. However, in a challenging economy where growth is harder to achieve, many businesses are missing out on this opportunity. Over one-third (38%) of consumers believe that in the current economy, businesses have not changed their attitude toward customer service. On the contrary, 27 per cent say that companies are now paying less attention to good service.

The Canadian findings were released today as part of the American Express Global Customer Service Barometer, a survey conducted in Canada and eleven other countries exploring attitudes and preferences toward customer service.

"Canadian consumers are savvy when it comes to customer service," said Andrew Carlton, General Manager and Vice President, World Service at American Express Canada. "They expect good value for their money and they vote with their feet when they don't get it. Many consumers say companies haven't done enough to improve their approach to service in this economy, and yet it's clear they're willing to spend more with those that deliver excellent service - suggesting substantial growth opportunities for businesses that get customer service right. It's important to see customer service as a tangible investment in future loyalty and relationship building with our Cardmembers."

Almost All Agree Service is Important, but One-Quarter Feel They're Taken for Granted

Not surprisingly, nine in ten Canadians (91%) consider the level of customer service important when deciding to do business with a company. But less than one-quarter (15%) believe companies value their business and will go the extra mile to keep it.

Most feel businesses can do more to retain their loyalty:
- 51% believe that companies 'don't do anything extra to keep their business'
- Nearly one quarter think that companies 'take their business for granted' (24%)

Negative Experiences Leave Trail Online

Nearly two in five consumers (37%) report always or often using an online posting or blog to get others' opinions about a company's customer service reputation. But when consumers go online they're looking for "watch outs," saying they put greater credence in negative reviews on blogs and social networking sites than on positive ones (50% and 40%, respectively).

"Poor customer service experiences leave a trail online that can have a lasting legacy on a brand," Carlton said. "In the online space, positive recommendations are important, but people often give more weight to the negative. Every service interaction a company has online with its customers is crucial. Developing relationships with customers, listening to them, anticipating their needs, and resolving issues in a quick and direct way leave a lasting impression."

Canadians Vote with their Feet

A negative service experience is an important factor for most Canadians: 85 per cent have decided never to do business with a company again because of poor customer service in the past. When asked how many poor experiences they allow, greater than two in five Canadians (44%) reported it takes two poor service experiences before they stop doing business with a company. Twenty-six per cent say they would discontinue their patronage after just one bad experience.

Importantly, consumers are far more forgiving if a company has earned their trust over time. The vast majority of consumers (88%) report they're willing to give a company a second chance after a bad experience if they've historically experienced great customer service with that company.

But companies who get it wrong should realize it's at a cost.
- Half of consumers (52%) expect something in return after a poor customer service experience.
- Beyond just resolving the problem, most consumers (77%) want an apology or some form of reimbursement.

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