Indians willing to pay a 22% premium for excellent customer service

May 4, 2011 - PRLog -- As the service economy flourishes, Indian consumers are willing to spend more with a company they believe provides excellent customer service compared to their global counterparts. On an average they are willing to spend as much as 22% more for better service. In fact ,  Indian consumers view businesses’ efforts towards providing good customer service positively. As per the American Express® Global Customer Service Barometer released today, more than 66% Indian consumers believe businesses have ‘increased their focus on providing good customer service’ while 45% think that companies ‘value their business and will go the extra mile for them.’

The American Express Global Customer Service Barometer, is an annual survey conducted in India and nine other countries exploring attitudes and preferences towards customer service.

According to Pradeep Kapur, Sr VP & GM, World Service India & Process Excellence, American Express, “As the lifestyle needs of consumers evolve in India, service experience becomes a critical determining factor to build brand loyalty, success and customer stickiness. This survey establishes the fact that businesses need to consider customer service as an investment as opposed to cost. Therefore businesses need to invest and build on their customer service capabilities which can contribute significantly towards establishing brand salience and trust amongst consumers”

Key highlights from Survey
•   90% of the surveyed consumers are willing to spend 22% more with a company they believe provides excellent customer service
•   80% Indians have not completed a business transaction or their intended purchase because of poor customer service.
•   Consumers in India are more likely to talk about their good experiences (67%) than about their bad experiences (56%).
•   96% believe that their customer service experience impact their impression of a company’s brand
•   A relatively common phrase “Your call is important to us. Please continue to hold” is also the most cringe-worthy amongst Indian consumers (34%)


Positive experiences, reflect positively on the brand
These experiences also have a positive rub off on the brand. Greater than nine in ten Indian consumers (96%) say that a customer service experience has an impact on their impression of a company’s brand. Significantly, more say a good experience (76%), rather than a poor experience (20%), has the most impact on their impression.  Over half (52%) would be willing to try a new brand or company in order to get better customer service.

The Multiplier Effect
Consumers will tell others about their customer service experiences, both good and bad. India though stands at odds with the rest of the world, showcasing a higher tendency towards discussing good customer service (98%) with 67% talking about it “all the time”.

When it comes to poor experiences though, Indian consumers are less likely to talk, but when they do, they tell more people. Under six in ten (56%) tell other people about a poor customer service experience ‘all of the time’. On average, they tell approximately 35 people about this experience.

“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,” Mr. Kapur added.  “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.”

Service Can Make or Break Brands
Indians vote with their wallets when they encounter super service – 80% of consumers have not completed a transaction or made an intended purchase because of a poor service experience.  Three in five Indians have even cancelled an online purchase or shopping experience because they were not satisfied with the service experience (59%). This rises to 75% among those who shop online daily or weekly.

On the other hand, the promise of better customer service is a draw for shoppers:
•   52% Indians would try a new brand or company for a better service experience.
•   45% think that companies ‘value their business and will go the extra mile’  
•   34% said companies are helpful but don’t do anything extra to keep their business.
•   And only 9% think companies take their business for granted.

Providing good customer service, leads to better business returns
Consumers who are willing to spend more with a company that they believe provides excellent customer service do so because they believe that ‘excellent service is worth spending more’ (34%) and they ‘place a high value on excellent customer service’ (24%). Others believe that the ‘companies who provide such service have earned their business’ (16%).  

Some consumers will do business no other way – ‘only spending with companies who provide excellent service’ (16%) or even ‘refusing to do business with a company that provides poor service’ (10%). Eight in ten (80%) consumers in 2011 have spent more with a company because of a history of good customer service experiences, higher than 2010 (67%).

Common Phrases Are Cringe-worthy
Businesses may want to ditch their traditional service scripts too.  Customers are irked by three of the most frequently-used customer service phrases –.  

Common Phrase   General Population Most Annoyed By This Phrase
“Your call is important to us. Please continue to hold.”   34%
“We’re unable to answer your question.  Please call xxx-xxx-xxxx to speak to a representative from xxx team.”   23%
“We’re sorry, but we’re experiencing unusually heavy call volumes.  You can hold or try back at another time.”   15%

But some believe that customer service should come free…
For those consumers who are not willing to spend more with a company that they believe provides excellent customer service
•   One third or greater say that it is because they ‘expect excellent service and should not have to spend more’ (37%); or
•   ‘Prices for goods and services are already too high’ (33%).  
•   Others say that it has to do with personal finances – they ‘can’t afford to’ (10%) or their ‘expenses have gone up’ (10%).  

About the American Express Global Customer Service Barometer
The American Express Global Customer Service Barometer research was completed online among a random sample of 1,002 India consumers aged 18+.  Interviewing was conducted by Echo Research between February 2 - 15, 2011. Overall, the results have a margin of error of +/- 3.1% at the 95 percent level of confidence.  The same survey methodology was used in Canada, Mexico, France, Germany, Italy, the U.K., the Netherlands, Australia, and the U.S.  

About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success.  The American Express service ethos, Relationship CareSM, is designed to train Customer Care Professionals to not only respond to a customer’s question or solve their problem, but go the extra step of offering the customer tailored information about how they can get more value out of their card and their relationship with American Express.  The company is a four-time consecutive recipient of the J.D. Power and Associates “Highest in Customer Satisfaction among U.S. Credit Card Companies” and a recipient of a 2010 Forrester Research Voice of the Customer Award.  American Express also ranked first in the credit card category of the Satmetrix 2011 Net Promoter® Industry Benchmarks.  Learn more at www.americanexpress.com and connect with us on www.facebook.com/americanexpress, www.twitter.com/americanexpress and www.youtube.com/americanexpress.