Will We Ever Learn?: The Sad State Of Customer Care In America

Will We Ever Learn?: The Sad State Of Customer Care In America
Will We Ever Learn?: The Sad State
Of Customer Care In America

Highlights From The 2013 Customer Rage Study

November, 2013




                                       Confidential & Proprietary - Page 1
Will We Ever Learn?: The Sad State Of Customer Care In America
Study Conducted By…




            In collaboration with




                                    Confidential & Proprietary - Page 2
Will We Ever Learn?: The Sad State Of Customer Care In America
Executive Summary




                    Confidential & Proprietary - Page 3
Highlights
• The 2013 customer problem rate increased five percentage points
  over 2011 (50% vs. 45%). This is 18 percentage points higher than
  that reported in the 1976 White House study. (See page 23.)
• Cable/satellite TV is still at the top of the list of most serious
  problems in 2013. (See page 24.)
• Customer rage increased eight percentage points since 2011 (68%
  vs. 60%). (See page 25.)
• Complainant satisfaction is no higher than that reported by the 1976
  White House study. In 2013, MOST complainants are
  DISSATISFIED with how companies are handling their customer
  complaints. (See page 31.)
• 56% of complainants felt that they got NOTHING as a result of
  complaining; a nine percentage point increase since 2011. Those
  who reported getting something felt that they got very little or
  BUPKUS (e.g., 76% of complainants wanted an apology but only
  32% got one). (See pages 37-38.)


                                                          Confidential & Proprietary - Page 4
Highlights (Continued)

•   The reason for these low levels of complainant satisfaction is not that
    companies have failed to adopt upgraded programs to handle customer
    complaints. On the contrary, programs such as complaint handling 800
    numbers, expanded remedies to compensate complainants for their
    problems with products/services, liberalization of warranties, etc. have
    become standard corporate policies. The problem is, instead, that
    companies ARE DOING ALL THE RIGHT THINGS, THE WRONG WAY.
    (e.g., 800 numbers: much too complicated automated response menus, not
    giving customer care agents adequate empowerment, under staffing so that
    complainants can’t get through to agents in a timely manner, etc.)
•   Does it pay to solicit complaints?
     − In the 1970’s, the White House study found that even dissatisfied complainants
       were nine percentage points more brand loyal than non-complainants. As a
       result of this finding, American companies have spent billions of dollars annually
       soliciting customer complaints. In this case, THERE DID SEEM TO BE A FREE
       LUNCH. (See page 40.)


                                                                          Confidential & Proprietary - Page 5
Highlights (Continued)
   − The Customer Rage surveys, however, found that TODAY
     dissatisfied complainants are now 12 percentage points less
     brand loyal than non-complainants. Therefore, there is a brand
     loyalty uplift only if complaints are satisfactorily resolved. Given
     the fact that MOST complainants are not satisfied, corporate
     America is spending billions of dollars annually on customer care
     programs that are actually losing them customers. The lesson to
     be learned for corporate customer care practice, then, is DO IT
     RIGHT, OR DON’T DO IT. (See page 41.)
• When companies added non-monetary remedies (e.g.,
  an apology) to the monetary relief they give customers,
  complainant satisfaction DOUBLED from 37% to 74%.
  (See page 43.)
• Posting information on the web about customer
  problems has almost doubled since 2011 (e.g., an
  increase of posting on social networking sites from 19%
  to 35%). (See page 45.)
                                                            Confidential & Proprietary - Page 6
Highlights (Continued)

• Although posting on the web about consumer problems has
  increased substantially, complainants still consider the telephone
  their primary channel for complaining by a margin of 11 to one over
  the internet (66% to 6%). (See page 46.)
• Party affiliation makes a big difference when it comes to customer
  care issues. For example, while Republicans “cursed/used
  profanity” less than Democrats when complaining (3% vs. 13%),
  they “yelled/raised their voice” much more often than Democrats
  (44% vs. 33%). Republicans reported less customer rage (58% vs.
  69% for Democrats), and felt that the time they spent complaining
  was more “worthwhile” (73% vs. 50% for Democrats). As might be
  expected, Republicans “trusted” the companies they do business
  with more than the Democrats (43% vs. 31%). Finally, Republicans
  got “revenge” against the companies that caused their problems with
  products/services three times more often than Democrats (6% vs.
  2%). (See page 51.)


                                                         Confidential & Proprietary - Page 7
Highlights (Continued)

• The products/services responsible for the most
  serious problems were also those that most
  DELIGHTED the 2013 respondents to the Customer
  Rage survey. (See page 52.)
• Nearly 76 billion dollars were at risk to business as a
  result of American households’ most serious
  problems with products/services in 2013. (This is an
  almost 18 billion dollar increase over 2011.) Given
  the low levels of complainant satisfaction reported
  by the Customer Rage survey, it is safe to assume
  that U.S. companies did not recover most of this at
  risk revenue. (See page 55.)
                                               Confidential & Proprietary - Page 8
Summary Of Key Findings: Core Rage
Study Questions
• Problem rates continue to increase; the 50% problem
  incidence in 2013 is 18 percentage points higher than in the
  1976 White House study.
• Cable/satellite TV are still at the TOP of the 2013 most
  serious customer problem list (17%); computer-related
  (hardware, software, internet, etc.) products/services has
  moved up to the third place in the league tables.
• Customer rage in 2013 has increased eight percentage points
  since 2011, from 60% to 68%.
• Time lost is still the most often reported damage in 2013 as a
  result of the most serious problem. (62% of problem
  respondents lost time vs. only 40% who lost money.) This is
  a big increase when compared to the lost time reported in the
  earlier waves of the Customer Rage surveys. (Only 50% lost
  time in the 2003 – 2011 waves of the study.)

                                                     Confidential & Proprietary - Page 9
Summary Of Key Findings: Core Rage
Study Questions (Continued)
• 80% of respondents reporting a customer problem in 2013
  complained to the entity that caused their most serious
  problem. (98% of the entities that caused the most serious
  problem were private companies.)
• Most complainants in 2013 contacted the company’s 800
  number (59%) and/or local retail outlets (57%).
• Only a small percentage of complainants in 2013 also
  contacted a non-governmental third party (e.g., BBB) (8%)
  and/or a governmental consumer protection agency (4%)
  about their most serious problem.
• There was a substantial increase in yelling and cursing in
  2013 regarding the respondents’ most serious problems as
  compared to that reported in the earlier waves of the
  Customer Rage surveys; 36% vs. 25% for yelling and 13% vs.
  7% for cursing.

                                                 Confidential & Proprietary - Page 10
Summary Of Key Findings: Core Rage
Study Questions (Continued)
•   Even though companies have substantially increased their spending on
    handling customer complaints (billions of dollars annually on call centers,
    enhanced remedies, expanded internet access, etc.), complainant
    satisfaction in 2013 is still no higher than in the 1970’s. MOST
    complainants are dissatisfied with how their customer problems are being
    handled.
•   The reason for these low levels of complainant satisfaction is not that
    companies have failed to adopt upgraded programs to handle customer
    complaints. On the contrary, programs such as complaint handling 800
    numbers, expanded remedies to compensate complainants for their
    problems with products/services, liberalization of warranties, etc. have
    become standard corporate policies. The problem is, instead, that
    companies ARE DOING ALL THE RIGHT THINGS, THE WRONG WAY
    (e.g., 800 numbers: much too complicated automated response menus, not
    giving customer care agents adequate empowerment, under staffing so that
    complainants cannot get through to agents in a timely manner, etc.)


                                                                   Confidential & Proprietary - Page 11
Summary Of Key Findings: Core Rage
Study Questions (Continued)
• Complainant satisfaction is strongly correlated
  with increased brand loyalty in 2013.
• In 2013, word of mouth resulting from
  dissatisfied complainants is nearly three times
  higher (27.7 people told about the most serious
  problem) than the word of mouth communicated
  by satisfied complainants (10.2 people told
  about the most serious problem).



                                        Confidential & Proprietary - Page 12
Summary Of Key Findings: Core Rage
Study Questions (Continued)
• Why is complainant satisfaction so low in 2013?
   − The percentage of complainants who felt that the time they spent
     complaining was WORTHWHILE dropped from 61% in 2011 to
     only 50% in 2013.
   − Only 21% of complainants had their problems resolved on first
     contact. The 60% of complainants who made three or more
     contacts to resolve their problems reported a level of satisfaction
     21 percentage points lower than that of “resolution on first
     contact” complainants.
   − The percentage of complainants who felt they got NOTHING as
     a result of complaining increased from 47% in 2011 to 56% in
     2013.
   − The minority of complainants who felt they got something for
     their efforts didn’t think they got very much (They got bupkus.)
     This was the case for both monetary and non-monetary
     remedies.


                                                           Confidential & Proprietary - Page 13
Summary Of Key Findings: Core Rage
Study Questions (Continued)
•   The 1976 White House study found that brand loyalty increased by 9
    percentage points (over the loyalty of non-complainants) among
    complainants who were dissatisfied with the action taken to resolve their
    problems. Satisfied complainants reported even higher increases in loyalty
    over that of non-complainants; +33 percentage points for minor problems
    and +44 percentage points for major problems. This loyalty uplift resulting
    from companies handling complaints led to the expansion of corporate
    customer care programs (800 numbers, liberalization of the remedies given
    to customers to resolve their problems, etc.) in the 1980’s and 90’s. EVEN
    IF A COMPANY DIDN’T SOLVE THE CUSTOMER’S PROBLEM THERE
    WAS A MEANINGFUL UPLIFT IN BRAND LOYALTY.
•   Data from the six waves (2003 – 2013) of the Customer Rage surveys,
    however, TELL A VERY DIFFERENT STORY. Now complaint handling
    results in a brand loyalty uplift ONLY IF COMPLAINANTS ARE SATISFIED.
    Dissatisfied complainants report a MEANINGFUL LOSS of brand loyalty; 12
    percentage points below the loyalty of non-complainants for both minor and
    major customer problems.




                                                                 Confidential & Proprietary - Page 14
Summary Of Key Findings: Core Rage
Study Questions (Continued)
•   The Customer Rage surveys found that complainants who only received
    non-monetary remedies were 16 percentage points less satisfied than those
    who received monetary remedies only. However, when non-monetary
    remedies were offered as a supplement to monetary relief, satisfaction
    DOUBLED from 37% (level of satisfaction reported by those receiving
    monetary remedies only) to 74%.

•   Use of the WEB
     − When compared to 2011, the percentage of problem households
       posting information about their customer problems on the web has in
       some instances almost doubled (e.g., on social networking sites from
       19% to 35%). Posting on the offending company’s web site increased
       from 11% in 2011 to 19% in 2013.
     − HOWEVER, by a margin of 11 to one (66% to 6%), complainants
       reported that the telephone, not the internet, was their primary channel
       for complaining in 2013.


                                                                  Confidential & Proprietary - Page 15
Summary Of Key Findings: Core Rage
Study Questions (Continued)
• 60% of respondents in 2013 felt that the standard of customer
  care during the past year was “excellent” (13%) or
  “acceptable” (47%). Only 10% felt that the standard of
  customer care during the past year was “less than
  acceptable” (6%) or “awful” (4%).
• 28% of respondents in 2013 felt that the quality of customer
  care had gotten “considerably better” (3%) or “better” (25%)
  during the past year. On the other hand, 25% of respondents
  felt that the quality of customer care had gotten “worse” (21%)
  or “considerably worse” (4%).
• Nearly 76 billion dollars of revenue is at risk to business as a
  result of the problem households’ most serious problems with
  products/services in 2013. Companies are losing most of this
  revenue given the high levels of dissatisfaction with corporate
  complaint handling practices.


                                                      Confidential & Proprietary - Page 16
Conclusion: Core Rage Study Questions
•   The findings from these Customer Rage studies produced both GOOD and
    BAD news.
•   The GOOD NEWS is that satisfactorily handled complaints are associated
    with high levels of brand loyalty. This supports the conclusion of the White
    House study that effective complaint handling practices can lead to
    increased profitability.
•   Industry leaders have validated this finding by realizing high ROI’s from their
    properly executed complaint handling initiatives. In such instances, adoption
    of “best practices” has had a positive impact on the bottom line.
•   The BAD NEWS, however, is that corporate complaint handling can be a
    double-edged sword. Ineffective policies lead to decreased levels of brand
    loyalty and negative ROI’s.
•   Unfortunately, this study finds that, from a macro-stand point, complaint
    handling practices have proven ineffective. Levels of complainant
    satisfaction are no higher today than in the mid-1970's when complaint
    handling departments were generally viewed as corporate backwaters.

                                                                    Confidential & Proprietary - Page 17
Conclusion: Core Rage Study Questions
(continued)
• Today, most companies have adopted many of the correct polices
  but have failed to properly execute these practices. They are doing
  ALL THE RIGHT THINGS, THE WRONG WAY. Further, the
  upgraded investment in corporate complaint handling departments
  has evidently NOT kept up with customers’ expectations.
• The challenge in the 1970’s was to convince senior management to
  invest adequate resources in corporate complaint handling
  programs. This challenge was successfully met, due in large
  measure, to the findings from the original White House study. The
  2003 – 2013 Customer Rage studies, however, suggest that this
  was a Pyrrhic victory.
• The challenge, then, is to take the substantial investment made by
  companies in upgraded complaint handling and make these policies
  work. The lesson to be learned for corporate customer care practice,
  then, is the same as was applicable in the mid-1970’s: DO IT
  RIGHT, OR DON’T DO IT.



                                                         Confidential & Proprietary - Page 18
Summary Of Key Findings: Special
Interest Questions
• When it comes to customer care issues, party
  affiliation, or the lack thereof, mattered in 2013:
   − The biggest differences were reported between
     Republicans and Independents
   − Fewer Republicans reported experiencing problems
     with products/services; when problems did occur,
     Republicans reported much less rage; by a margin of
     30 percentage points, Republicans felt the time spent
     complaining was more WORTHWHILE than
     Independents; and Republican complainants were
     much more satisfied with the action taken to resolve
     their problems.

                                                Confidential & Proprietary - Page 19
Summary Of Key Findings: Special
Interest Questions (Continued)
   − While Republicans “cursed/used profanity” when complaining the
      least, they “yelled/raised their voice” much more often when
      attempting to resolve their customer problems. Interestingly
      enough, Republicans got REVENGE three times more often than
      Democrats or Independents. Not surprisingly, Republicans
      reported the highest level of TRUST in corporations; and felt that
      the standard of customer care experienced during the past year
      was more “excellent/acceptable” (70%) than Democrats (60%) or
      Independents (57%).
• With the exception of “small ticket packaged goods,” when
  respondents were asked to name the ONE product/service that they
  were most “delighted” by during the past 12 months, the most
  mentioned products/services in 2013 were those that also caused
  the highest rate of most serious problems. When high salience
  products/services work really well, they delight us. When these
  same products/services are responsible for customer problems, we
  hate them.


                                                           Confidential & Proprietary - Page 20
Study Methodology
• Follow-up to 1976 White House Study
   − Core questions from White House Study repeated in Customer Rage
     surveys
   − Results of Customer Rage surveys compared to White House study findings
• Sixth wave of Rage surveys
• Completed August 2013
• Telephone survey interviewing a representative household sample
  of 1,003 respondents
• 2013 results’ overall margin of error is ±1.9% - 3.1% (@ 95%
  confidence)
• Survey content
   − Core questions repeated from previous five Rage surveys (2003 – 2011)
   − Focus on most serious problem with products/services experienced in the
     past 12 months
   − Special interest questions not asked in every wave of Customer Rage
     survey to address topical issues


                                                                Confidential & Proprietary - Page 21
Problem Experience




                     Confidential & Proprietary - Page 22
Problem Experience Continued To
 Increase
                  % Respondents Experiencing A Product/Service Problem
                                In The Past 12 Months

100%

80%
                50%
                                  45%
60%                                                  39%
                                                                        32%
40%

20%

 0%
       2013 Rage Study   2011 Rage Study 2003 - 2007 Rage     1976 White
                                             Studies          House Study


                                                                  Confidential & Proprietary - Page 23
Products/Services That Caused The Most
Serious Problem: Top 5
                                2013     2003-2011
                              Problem     Problem
   Product/Service Type     Respondents Respondents
   Cable/Satellite TV          17%          7%
   Telephone (land lines,
                               16%         10%
   cell)
   Computer-related
   (hardware, software,         9%          8%
   internet, etc.)
   Consumer electronics –
                                8%          8%
   non-computer
   Automobile                   7%         11%

                                                 Confidential & Proprietary - Page 24
Level Of Customer Rage Still High;
                  With Big Increase Over Last Survey


                         100%
                                           68%                                   71%
% Problem Respondents
– Extremely/Very Upset




                                                            60%
                         80%

                         60%

                         40%

                         20%

                          0%
                                2013 Rage Study   2011 Rage Study   2003 - 2007 Rage
                                                                        Studies


                                                                            Confidential & Proprietary - Page 25
Damages Suffered:
Escalation In Time Lost

                           2013     2003-2011
                         Problem     Problem
     Type Of Damage    Respondents Respondents
     Time                 62%         50%
     Money                40%         43%
     Physical injury       5%          6%




                                            Confidential & Proprietary - Page 26
Complaining1 To The Company2 That
Caused The Most Serious Problem
                                                                            2013
                       Where Complained To                               Complainants
                       Company’s 800
                                                                                   59%
                       number
                       Local retail outlet                                         57%
                       Head office                                                 36%
                       Company’s website                                           26%




 1   80% of 2013 respondents who experienced problems with products/services complained to the company that caused their problems.
     Only 69% of problem households complained in the 1976 White House study.
 2 98% of the entities that caused the respondents’ most serious problems during the past 12 months were companies.



                                                                                                             Confidential & Proprietary - Page 27
Complaining To Third Parties

                                             2013
 Third Parties                            Complainants
 Non-governmental agencies like the BBB       8%
 Governmental consumer protection
                                              4%
 agencies
 Initiated legal action                       2%




                                                Confidential & Proprietary - Page 28
Other Ways Respondents With Problems
Expressed Their Displeasure
                                                                2013     2003-2011
                                                              Problem     Problem
  Expressions Of Displeasure                                Respondents Respondents
  Shared the story with my friends/other people                 89%         87%
  Threatened to talk with or contact management                 62%         54%
  Decided I'd never do business/come back again                 46%         53%
  Yelled or raised my voice                                     36%         25%
  Threatened to report the entity that caused the problem
                                                               16%           17%
  to a government regulatory agency
  Cursed/used profanity                                        13%            7%
  Threatened legal action                                      8%             8%
  Threatened to contact the media                              7%             6%




                                                                          Confidential & Proprietary - Page 29
Complainant Satisfaction




                           Confidential & Proprietary - Page 30
Complainant Satisfaction Is Still No
                           Higher Than In The 1970’s
                           60%

                                                           44%                                                                44%
                                                                                             40%
% Complainants Satisfied




                           40%

                                                                                                               23%
                                            20%
                                                                             18%
                           20%




                           0%
                                      2013 Rage Study                   2003-2011 Rage                   1976 White House
                                                                            Studies                           Study
                                 Top two boxes (“received more than I asked for” and “completely satisfied”)

                                 Top three boxes (Add answers to the “I wasn’t completely satisfied, but the action taken was acceptable” response
                                 category to the top two box responses.)

                                                                                                                           Confidential & Proprietary - Page 31
Impact Of Complainant Satisfaction In 2013
            Satisfaction                                                                                       Average
                                                        % Satisfied With             % Recommend             Number Told
         With Action Taken                                 Company                     Company                  About
         (% Complainants)                               (Top 2 Boxes)1               (Top 2 Boxes)2            Problem


             SATISFIED
            (Top 2 boxes)                        =           85%                        54%                      10.2
                (20%)

            MOLLIFIED
          (Middle 2 boxes)                       =           34%                        21%                      15.7
               (39%)

           DISSATISFIED
          (Bottom 2 boxes)                      =             9%                         9%                      27.7
                (41%)

         All complainants                                    34%                         23%                    19.2

   1   Based on “very” and “somewhat satisfied” with offending company.
   2   Based on “definitely” and “probably would recommend” offending company to a friend or colleague.



                                                                                                          Confidential & Proprietary - Page 32
Why Is Complainant Satisfaction So
Low?




                               Confidential & Proprietary - Page 33
Was The Time Spent Complaining To The
                               Offending Company Worthwhile?

                                                                                                 61%
                               70%
% Complainants Answering YES




                                                              50%
                               60%                                                                                               47%

                               50%

                               40%

                               30%

                               20%

                               10%

                                0%
                                            2013 Rage Study                    2011 Rage Study                    2005 - 2007 Rage
                                                                                                                      Studies1
                               1 A comparable question was not asked in the 2003 and 2004 waves of the Customer Rage surveys.


                                                                                                                                Confidential & Proprietary - Page 34
“Ping-Ponging”:
                             Still The Deadly Game In 2013
                         100%                                                Average # Of Contacts:
                                                                                   2013: 4.0
                                                                                 2003-2011: 4.2
With Action Taken (Top 2 Boxes)




                                  80%
   % Complainants Satisfied




                                  60%
                                                  35%
                                  40%                              24%
                                                                                         14%

                                  20%


                                  0%
                                        One contact     Two contacts     Three or more contacts

     All Complainants                     (21%)            (19%)                 (60%)


                                                                                    Confidential & Proprietary - Page 35
Double “Bupkus” Again




                        Confidential & Proprietary - Page 36
What Complainants Got: “Bupkus”

                           % OF RESPONDENTS
                     WHO FELT THAT THEY GOT NOTHING
                                                                                                                        1
         2013                                         2011                                  2004 - 2007


    56%                                            47%                                           52%
1 A comparable question was not asked in the initial wave (2003) of the Customer Rage surveys.




                                                                                                  Confidential & Proprietary - Page 37
2013 Comparison Between What
Complainants Wanted To Get And What
They Got: “Double Bupkus”
 Remedy 1                                                      % Wanted       % Got
 To be treated with dignity                                      94%            35%
 An assurance that my problem would not be repeated              84%            21%
 Offending company put itself in my shoes                        83%            23%
 My product repaired/service fixed                               81%            31%
 An explanation of why the problem occurred                      81%            23%
 A thank you for my business                                     80%            33%
 An apology                                                      76%            32%
 To be talked to in everyday language; not scripted response     76%            32%
 Just to express my anger/tell my side of the story              68%            37%
 My money back                                                   52%            21%
 A free product or service in the future                         41%            14%
 Financial compensation for my lost time, inconvenience or
                                                                 40%            10%
 injury
 Revenge                                                         20%             3%
 Other                                                           12%             3%
 1 Shading indicates a non-monetary remedy.

                                                                          Confidential & Proprietary - Page 38
Does It Pay To Solicit Complaints?
Yes Then, Not Now




                                Confidential & Proprietary - Page 39
Brand Loyalty Uplift Resulting From Getting
Problem Households To Complain: 1976 White
House Study1

                                                                             Percentage Point Increase/Decrease In
                                                                                      Brand Loyalty For

              Uplift from Non-                                                 Minor                               Major
                                                                                      2                                   3
             Complainants To…                                                Problems                            Problems
          Satisfied Complainants                                                 + 33%                               + 44%
      Dissatisfied Complainants                                                    + 9%                                + 9%



 1 In the White House Study, satisfaction with the action taken to resolve complaints was measured using a five item, ordinal word scale. Satisfaction
   was defined by the top three boxes (“received more than I asked for,” “completely satisfied” and “not completely satisfied but the solution was acceptable.”)
   Dissatisfaction was defined by the bottom two boxes (“not completely satisfied but I did get something” and “not at all satisfied.”)
 2 Where damages caused by most serious problem were valued at $1 - 5.
 3 Where damages caused by most serious problem were valued at $100+.



                                                                                                                                 Confidential & Proprietary - Page 40
Just Getting People To Complain Is No Longer Enough:
       The 2003-2013 Customer Rage Studies Report That
       TODAY Companies Must SATISFY Complainants In
       Order For There To Be An Uplift In Brand Loyalty1

                                                                                               Percentage Point Increase/Decrease In
                                                                                                        Brand Loyalty For

                           Uplift from Non-                                                      Minor                                  Major
                                                                                                        2                                      3
                          Complainants To…                                                     Problems                               Problems
                      Satisfied Complainants                                                        + 21%                                  + 20%
                  Dissatisfied Complainants                                                          - 12%                                  - 12%


1   The dissatisfied response categories to the satisfaction with the action taken to resolve complaints question used by the Customer Rage studies differed from those used by the
    White House study in two aspects. First, the fourth box response category used the terminology “but some action was taken” instead of “but I did get something.” Second, a sixth
    response category was added: “I was not at all satisfied because no action was taken.” Those responding to this sixth category were coded as dissatisfied complainants.
2   Where damages caused by most serious problem were valued at $20 or less. (An inflation adjustment calibrated so that this value of damages is comparable to the $1-5 figure
    used in the 1976 White House study.)
3   Where damages caused by most serious problem were valued at $400 or more. (An inflation adjustment calibrated so that this value of damages is comparable
    to the $100 or more figure used in the 1976 White House study.)




                                                                                                                                                        Confidential & Proprietary - Page 41
Maybe There Still Is A Free Lunch




                                Confidential & Proprietary - Page 42
Relationship Between Remedies And Percent
Of Complainants Satisfied In 2004 – 20131:
Non-Monetary Remedies Are a Very Valuable
Add On
                                                                                % Satisfied
                                                                                With Action
              Remedies Complainants Got                                           Taken 2
              Only monetary 3                                                          37%
                                                 4
              Only non-monetary                                                        21%
              Both monetary and non-
                                                                                       74%
              monetary

1 A comparable question was not asked in the initial wave (2003) of the Customer Rage surveys.
2 Top 3 boxes
3 Monetary remedies include product repaired/service fixed, money back, free product/service in future, or compensation for
  damages
4 Non-monetary remedies include treated with dignity, agent didn’t use scripted response, assurance problem would not be
  repeated, an explanation why the problem occurred, a thank you for patronage, offending company showed empathy to
  complainant’s concerns, opportunity to vent, and an apology



                                                                                                         Confidential & Proprietary - Page 43
Use Of Web 2.0: Is The Glass Half
Full Or Half Empty?




                                Confidential & Proprietary - Page 44
Posting Information About The Most
Serious Problem On The Internet:
Substantial Increase Since Last Survey
                                                                         % of Problem Households
                                                                                Who Posted
      Type of Website                                                       2013         2011
      Site operated by offending
                                                                                  19%                                    11%
      company
                                                          1
      Social networking site                                                      35%                                    19%
                                               2
      Social media site                                                            4%                                    1%
      Product/service review site                                                  7%                                    4%


 1   Site where postings are shared with a defined list of friends, followers or contacts; a closed system.
 2   Postings are shared on sites where there is not a defined list of friends, followers or contacts; an open system.




                                                                                                                              Confidential & Proprietary - Page 45
Primary Channel For Complaining:
                 Telephone Still Beats The Internet By A
                 Margin of 11 To One1
                 100%


                 80%                                   66%                       65%
% Complainants




                 60%


                 40%


                 20%                                                                                                            6%                       4%


                   0%
                                                     Telephone                                                                Internet

                                                                                   2013                     2003
                 1 In person/face to face and paper complaints (mail, fax, etc.) are primary channels of complaining for 24% and 2% of complainants in 2013, respectively.


                                                                                                                                                 Confidential & Proprietary - Page 46
General Customer Care Issues




                               Confidential & Proprietary - Page 47
Standard Of Customer Care During Past Year1
                  100%



                  80%
 % Respondents2




                  60%
                                                          47%
                                                                    44%

                  40%                                                              31%      32%



                  20%              13%
                                             11%
                                                                                                                    9%
                                                                                                          6%                  4%         4%

                   0%
                                 Excellent              Acceptable               Average                Less than            Awful
                                                                                                        acceptable

                                                              2013                        2004-2011

                     1   A comparable question was not asked in the initial wave (2003) of the Customer Rage surveys.
                     2   Among all respondents.



                                                                                                                         Confidential & Proprietary - Page 48
Quality Of Customer Care During Past
Year – Better or Worse?1
                 100%



                 80%
% Respondents2




                 60%
                                                                                  46%
                                                                                            41%
                 40%
                                                                                                                      29%
                                                           25%      24%
                                                                                                         21%
                 20%

                                    3%       2%                                                                                   4%       4%

                  0%
                              Considerably                Better            Neither better nor            Worse             Considerably
                                 better                                          worse                                         worse

                                                             2013                        2004-2011

                   1   A comparable question was not asked in the initial wave (2003) of the Customer Rage surveys.
                   2   Among all respondents.



                                                                                                                            Confidential & Proprietary - Page 49
Special Interest Questions




                             Confidential & Proprietary - Page 50
When It Comes To Customer Care Issues, Party
Affiliation, Or The Lack Thereof, Matters: 2013
  Selected Customer Care Issues                           Republicans   Democrats Independents
  Experienced product/service problems in past year          41%           47%          58%

  Problem experience resulted in customer rage               58%           69%          71%

  Complained about most serious problem                      78%           78%          86%

  Time spent complaining was “worthwhile”                    73%           50%          43%

  “Got nothing” as a result of complaining                   46%           56%          57%

  Satisfied with action taken to resolve most serious
                                                             60%           46%          38%
  problem (top three boxes)

  Got “revenge” against offending company                     6%           2%            2%

  Expression of displeasure about most serious-
                                                              3%           13%          15%
  problem – cursed/used profanity

  Expression of displeasure about most serious
                                                             44%           33%          33%
  problem – yelled/raised voice

  “Trust” in companies respondents regularly do
                                                             43%           31%          32%
  business with (“a great deal/quite a lot” of trust)

  Standard of customer care (“service you get before,
  during, and after buying a product or service”)            70%           60%          57%
  experienced during past year (“excellent/acceptable”)



                                                                                     Confidential & Proprietary - Page 51
Products/Services That Delighted The Most
Respondents Are Largely The Same As Those
That Caused The Highest Percentage Of The
Most Serious Problems

                                      2013 Survey          2013 Problem
                                      Respondents          Respondents
  Product/Service Type           (Delighted Customers) (Most Serious Problem)
  Telephone (land lines, cell)           10%                    16%

  Computer-related (hardware,
                                         10%                    9%
  software, internet, etc.)

  Automobile                             10%                    7%

  Small ticket packaged goods            8%                     3%

  Cable/satellite TV                     7%                     17%

  Consumer electronics – non-
                                         7%                     8%
  computer




                                                                  Confidential & Proprietary - Page 52
Delight And Disappointment With
Products/Services: 2013
• With the exception of “small ticket packaged goods,”
  products/services that “delighted” the most survey
  respondents also caused the highest percentage of most
  serious problems. When high salience products/services
  work really well, they delight us. When such
  products/services are responsible for customer
  problems, we really hate them.
• When respondents were asked what products/services
  “MOST disappointed” them within the past 12 months,
  five of the six products/services that disappointed them
  the most often were: cable/satellite TV (13%), telephone
  (13%), computer-related (8%), automobile (7%), and
  consumer electronics – non-computer (5%). These are
  the products/services that are at the top of the most
  serious problem league tables.

                                               Confidential & Proprietary - Page 53
Some Eye-popping Statistics




                              Confidential & Proprietary - Page 54
Vital Statistics: Study Findings
Extrapolated To The Nation’s Population
                                                                                                                                    1




• Number of households                                                       2013                                    2011
  experiencing at least one
  problem during past 12 months
                                                                2        56,000,000                             50,400,000

• Number of households
                    3                                                    38,080,000                             30,240,000
  experiencing RAGE
• Number of households posting
  information about their most
                                                                         25,200,000                             13,608,000
  serious problem on at least one
  website
                                                         4
• Revenue at risk to business                                       $75,992,000,000                        $58,262,400,000

  ___________________
  1   Statistics apply to ONLY most serious problem during the past 12 months
  2   Assuming 112,000,000 total US households
  3   Based on “extremely” and “very upset” respondents
  4   The mean cost of products/services subject to most serious problem multiplied by the number of households experiencing problems.


                                                                                                           Confidential & Proprietary - Page 55
For Further Information




                          Confidential & Proprietary - Page 56
Will We Ever Learn?: The Sad State
Of Customer Care In America
(Results From The 2013 Customer Rage
Study: Press Briefing)

   For more information about the 2013 Customer
   Rage study, please contact:

   Scott M. Broetzmann
   President & CEO
   Customer Care Measurement & Consulting
   20 S. Quaker Lane, Ste. 230
   Alexandria, Virginia 22314

   703.823.9531
   scott@customercaremc.com
   www.customercaremc.com

                                                  Confidential & Proprietary - Page 57
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