Excellent Customer Service Boosts Spending

July 12, 2010

This article is included in these additional categories:

Analytics, Automated & MarTech | Asia-Pacific | Brand Metrics | Data-driven | Europe & Middle East | Global & Regional

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. This average spending boost ties US consumers in third place with Italian consumers, only consumers in Japan (10%) and India (11%) have a higher average spending increase resulting from excellent service.


However, while findings of the American Express Global Customer Service Barometer indicate only a little more than one-third of Americans (37%) believe that companies have increased their focus on providing quality service, 27% feel businesses have not changed their attitude toward customer service, and 28% say that companies are now paying less attention to good service.

Almost All Consider Customer Service Important
Not surprisingly, nine in ten Americans (91%) consider the level of customer service important when deciding to do business with a company. But only one-quarter (24%) believe companies value their business and will go the extra mile to keep it.

Most consumers feel businesses can do more to retain their loyalty. Forty-eight percent feel companies are helpful but don’t do anything extra to keep their business, and 21% believe that companies take their business for granted.

Customers Spread Good News
Contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to speak positively about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service.

Good service experiences also carry more weight than bad ones when Americans make future spending decisions. Consumers are far more likely to give a company repeat business after a good service experience (81%) than they are to never do business with a company again after a poor experience (52%).

In fact, consumers say the three most influential factors when deciding which companies they do business with include personal experience (98%), a company’s reputation or brand (92%), and recommendations from friends and family (88%).

Half of Consumers Seek Online Advice
Nearly half (48%) of consumers 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 (57% and 48%, respectively).

India Values Service Most
Similar to their US counterparts, a majority of consumers in all but one country surveyed (Netherlands, 47%) feel that customer service has become more important in the current economy. India by far has the highest percentage of consumers who hold this belief (82%).


In most countries where the highest percentage of consumers feel that service is more important today, there is a corresponding belief that companies have increased their focus on providing good customer service: 65% of Indian, 49% of Japanese and 47% of Mexican consumers agree with this statement.

However, in Australia (71%), Germany (66%), and Canada and Italy (65% each), consumers say they feel companies haven’t increased their focus on service or are paying less attention to it.

Opinions Count on Tech Items
When asked what items they would not buy without consulting online reviews, global consumers were most apt to select products that could broadly be considered “technical” in nature, according to recent data from The Nielsen Company. The leading items, consumer electronics (40%), cars (38%), and software (28%) are all highly advanced, technical products which are only fully understood by experts. This description also applies to telecommunications services (22%). It is also worth noting that all these items, especially cars, are big-ticket items.

About the Data: The American Express Global Customer Service Barometer research was completed online among a random sample of 1,000 US consumers aged 18 and older. Interviewing was conducted by Echo Research between April 13-20, 2010. The same survey methodology was used in Canada, Mexico, France, Germany, Italy, the UK, Spain, the Netherlands, Australia, India and Japan.

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