According to a new Ovum survey commissioned by STELLAService, the first completely independent customer service ratings agency, the value of great online customer service in 2010 is USD $17.3 billion. "The Value of Great Customer Service" survey derived the dollar impact of great customer service by consumer category (i.e. financial services, healthcare, utilities, brick and mortar retailers, online retailers, etc.). It determined that the total value of great customer service across all consumer categories is USD $268 billion per year. On average, the survey found that Americans are willing to spend approximately 9.7% more for great customer service. The survey, however, paid particular attention to the way in which great service impacts the buying decisions of online consumers. It was concluded that consumers in the online retail category are willing to pay an even higher premium for great service (10.7%) than they would in most other categories. Based on the average amount spent by online consumers each year, the survey found that $17.3 billion of value can be created in 2010 by Internet retailers that offer excellent customer service. Due to the seemingly distant and remote nature of online shopping, it makes sense that consumers would pay a higher premium to have the comfort and peace of mind that they will be taken care of in the case of a serious question, concern or problem.
The survey polled 304 consumers about their spending habits and opinions of customer service. It was conducted by Greenfield Online and developed by Ovum, a part of the Datamonitor Group. "The figures were calculated based on average spend per person per year with each type of company." said Aphrodite Brinsmead, an Analyst on the Customer Interaction team at Ovum. "Value is the extra percentage that people are willing to spend with various types of companies as a result of great customer service."
Specific topics covered in the survey included:
- The additional amount (the "premium") consumers are willing to spend on a product or service if they know they will receive great customer service.
- The customer service factors and considerations that are most important to consumers when purchasing goods or services.
- Consumer behaviour subsequent to receiving great customer service.
For the online retail category, the leading factor or consideration for great customer service is speed of delivery. Helpfulness of customer service representatives and ease of access to information on a company's Web site also topped the list for important elements of customer service for Internet retailers.
"We have always known that consumers value great service, but this study is the first to quantify it in terms that people and businesses understand - in dollars and cents," said Jordy Leiser, Co-founder and CEO of STELLAService. "It's no secret why the companies we've identified as the Elite online retailers (such as Zappos.com, Diapers.com, Staples.com and LLBean.com) have steam-rolled through this difficult economic environment; they treat their customers like family and friends. Consumers gravitate toward companies that provide exceptional service, especially in the world of e-commerce."
Leiser went on to say that, "The opportunity for Internet retailers to build their businesses around providing great service is too big to ignore. By improving the basic practices and policies that matter most to online consumers, a business can quickly and dramatically bolster its competitive position, improve its financial profile and increase customer loyalty. It's a win for businesses, a win for investors, and most importantly a win for consumers."
Ian Rowley, Business Development Manager for Parker Software comments "It has always proved difficult to measure the success of customer service in terms of the potential revenue uplift that can be gained, this report now gives something that is quantifiable. The report is actually mirroring our own success uptake of our WhosOn Live Chat solution, which is aimed at improving online customer support, is increasing significantly. The report states 'ease of access to information', WhosOn enables live one to one interaction via text based chat with a website visitor and a customer service representative, improving customer support in an instant"!
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