How Customers React
When we interact as customers with a business or organisation, we will have an experience ranging from “first class” to “terrible” (or similar). I’ve asked myself a number of times how we react afterwards, and what we’re likely to do based on my own experiences. Customer experience experts the Temkin Group recently produced a study on consumer reactions (based on 10,000 consumers) to their experiences and found that they were likely to react in a number of ways depending on whether their experience was “Very Good” or “Very Bad”.
We don't know what “Very Good” or “Very Bad” mean in this case but assume that they are better than “Good” and worse than “Bad”. The reactions ranged from telling friends to keeping quiet and turned out as follows:
Tell one’s friends about it (by email, by phone or in person):
Very Good Experience: 44.0%;
Very Bad Experience: 46.7%.
Keep silent and not tell anyone:
Very Good Experience: 34.0%;
Very Bad Experience: 27.0%.
Send direct feedback to business by phone, letter, via website:
Very Good Experience: 20.2%;
Very Bad Experience: 26.7%.
Post about it on Facebook:
Very Good Experience: 14.8%;
Very Bad Experience: 17.1%.
Comment on a 3rdparty site (e.g. Yelp, TripAdvisor):
Very Good Experience: 10.7%;
Very Bad Experience: 11.1%.
Tweet about it:
Very Good Experience: 6.5%;
Very Bad Experience: 8.0%.
One of the most interesting responses above is the percentage of people who did nothing whether their experience was very good or very bad (34% and 27% respectively).
The most likely (over 20%) reactions are to tell friends, send direct feedback to the organisation or keep silent, with people being most likely to tell their friends. The least likely reaction is to tweet about it. Some may tell their friends and send direct feedback.
So, if I’m in a business where customer satisfaction is vital, I’m only likely to hear about negative experiences if the customer sends direct feedback either to myself or if I monitor 3rdparty sites. This means I’ll hear about a maximum of 37.8% of unhappy customers (unless one of them is a friend of mine or of one of my staff). I have little control over the (unvoiced) perception that friends of almost 50% of unhappy customers may have of my business.
If I’m in a business that sees 200 customers a day and assuming (optimistically) that 60% have an experience that is “Bad”, “Good” or better, that means that perhaps 40% or 80 customers may have had a very bad experience that they may react to. Of them, 37 are likely to tell their friends about it. That means that I have at least74 negative perceptions on my hands (the original 37 unhappy customers plus at least one friend each). That’s a lot of negative publicity.
The other “dangerous” group is the 27-34% who stay silent, but probably move their business elsewhere without letting me know. This means that I could lose 22 (or just over 10%) of my 200 customers without knowing why.
Assuming that the psychology outlined above is accurate, what does it mean for us? First that we need to make sure we understand our customers’ expectations and exceedthem.
Second, if they have a problem, they should be encouraged to let us know and it should be easy to do so.
Third: armed with the knowledge of the problem, we need to fixitso it can't happen again.
If Temkin Group have got it right, it’s a wake-up call for us all.
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Customer Care, Selling, Strategy
posted by William Martin @ 16:57
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