Consumers More Likely to Share Bad Experiences, but Companies Can Recover

February 27, 2014

TemkinGroup-Consumer-Reactions-to-Service-Experiences-Feb2014Some 23% of consumers will give feedback directly to companies following a very good service experience, but 32% will do so following a very bad experience, finds the Temkin Group in newly-released survey results. How companies are able to respond to the bad experiences has a significant effect on consumers’ future spending patterns with them. Indeed, the research indicates that companies have an opportunity to recover from bad experiences and turn them positive.

Specifically, consumers who rated companies’ response to their bad service experience as being very poor (1 on a 7-point scale) were far more likely to decrease their spending (62%) than increase it (2%), a fairly obvious result. But among those who rated the companies’ response as very good (7 on the 7-point scale), more increased (29%) than decreased (21%) their spending.

It’s not the first time that research has shown that companies can recover from bad service. Last year, research from Bazaarvoice found 7 in 10 survey respondents indicating that a brand’s response to an online consumer review changes their perception of the brand. Moreover, shoppers who read brand responses to negative reviews showed significantly higher product sentiment and intent to purchase.

That’s important because consumers are apt to not only share feedback directly with a company but also to share it in public ways, and that sharing sometimes has a “negative bias,” according to the Temkin Group. Among 25-34-year-olds, for example, who are the most likely to share their experiences, respondents were slightly more likely to share bad rather than good experiences in a variety of ways, whether by telling a friend directly (60% vs. 57%), sharing it on Facebook (31% vs. 28%), or writing a review (20% vs. 18%). Last year, a survey from Zendesk found clearer results suggesting that bad customer service interactions are more likely to be shared than good ones.

That could be bad news for internet and TV service providers, which suffer from chronically low customer satisfaction ratings. Indeed, the Temkin Group research indicates that these two industries are the most likely to deliver poor customer experiences to their customers. However, they appear to be a little more insulated from the effects of these experiences, with fewer than 15% of their customers stopping spending with them following bad experiences. (By comparison, more than one-quarter of those who had bad experiences with computer makers and hotel chains, among others, stopped spending with them.) That’s likely a function of less competition in the aforementioned industries, making it more difficult for consumers to easily switch to another provider.

A couple of other findings from the report:

  • While 16% of customers of TV service and internet service providers reported a bad experience during the 6 months prior to the survey, only 3% had a bad experience with a grocery chain;
  • Investment firms, retailers and car rental agencies are among the best at responding to bad experiences, while TV and internet service providers and health plans are among the worst.

About the Data: The data is based on a survey of 10,000 US consumers conducted during Q3 2013.

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