In an economic downturn, more than a quarter of Australians are most likely to remain loyal to companies that provide them with the best service, according to a new study by StollzNow Research.
Investigating what impact the current economic situation will have on consumer spending and customer service in the run-up to Christmas, the survey, commissioned by RightNow Technologies, polled 500 Australian adults and found that:
• 47 per cent of all respondents had suffered a negative customer experience in the last six months
• 79 per cent of consumers have stopped doing business with an organisation because of a bad experience
• 71 per cent tell others about their negative customer experiences with the main aim (69 per cent) being to prevent other consumers doing business with the company at fault.
Even at the best of times these statistics are likely to have a significant impact on an organisation’s bottom line in terms of lost business. However, the financial ramifications are potentially exacerbated when considered against the backdrop of consumer spending trends also revealed by the study. Asked about their online, retail and Christmas spending plans, Australians indicated that, in light of the global economic situation:
• 35 per cent of them have already decreased both online and retail spending
• In the next six months 35 per cent are likely to decrease spending in retailers and 29 per cent will decrease online spending
• 36 per cent will buy the same number of Christmas presents as last year but at a lower spend per person, 27 per cent will try to buy fewer presents.
With consumers reigning in their spending, good customer service as a competitive differentiator becomes increasingly important for businesses if they are to weather the economic turmoil. The provision of ‘outstanding service’ remains the number one reason why Australians recommend companies to others and, even in an economic downturn, 28 per cent of consumers will remain loyal to companies that provide them with the best service.
The survey also found that the Federal Government’s Economic Security Strategy whereby families, pensioners and carers will receive one-off payments, may not help stimulate the economy. When asked what they would do with $1000 if they were given it tomorrow, only 17 per cent would spend it while 61 per cent of Australian’s would save it.
“There are tough times ahead for both companies and consumers,” said Brett Waters, RightNow’s vice president, Asia Pacific-South.
“Consumers are concerned that the dollar in their pocket isn’t going as far as it used to, so they are more selective about whom they spend with and focusing on finding better deals. What companies need to remember is that while competitive prices may seem like the short-term fix to satisfying customers, longer term, customer care strategies, which focus on delivering good customer experiences, will ensure customers remain loyal through rough trading environments and beyond.”