The subtle art of retaining customers

People often write to the Gripe Line when they feel as if they have exhausted all options with their current vendor. Frustrated by poor tech support or customer service, readers turn in letters that frequently end with a defection to another vendor.

Often, the writers will point out that they paid more money in the switch, and that the extra cost — if their needs are being met — has proved to be money well spent. So I was intrigued by a recent study from RightNow.com that measured how much more money people are willing to spend to get better customer service.

[ For a look at where tech support is going, read Christina Tynan-Wood’s “The (better) future of tech support.” | Frustrated by tech support? Get answers in InfoWorld’s Gripe Line newsletter. ]

According to the survey, 85 percent of people are willing to spend more money to get better service, with 76 percent willing to pay about 5 percent more to be assured that the customer service they receive is good. More than half (55 percent) would pay a 10 percent premium on the product price to be assured of a higher level of service. But a small number (10 percent) would be willing to ante up 25 percent more for better service.

Not only are consumers willing to pay more up front for goods that come with great service but that service makes them loyal, repeat buyers. This goes a long way toward explaining why Apple is able to charge more for its products and instill such customer loyalty, as “oldhat” attests in the comments on recent Gripe Line post “Disgruntled HP customer meets happy resolution“:

If you look at Consumer Report’s customer satisfaction survey results, usually there’s Apple and then there’s not much difference among the rest. Unfortunately, I have to run software that only runs on Windows. I would be extremely loyal to a [Windows PC] manufacturer that provided good support!

But “good support” is hard to quantify. Over the years, companies’ reputations have fluctuated significantly on satisfaction surveys such as PC World’s Reliability and Service Report and those put out by Consumer Reports. Worse, it’s often hard to pinpoint why this happens.

So how do customers decide? (How do you decide?)

According to the RightNow survey: word of mouth, which includes comments on blogs like this one. (So speak up!) Though it is often said that word of mouth is the one form of advertising that can’t be bought, it may not be technically true. Maybe it can’t be bought with hard currency, but it can, apparently, be bought with good service.

As it turns out, the difference between good service and bad service is often quite subtle. According to RightNow’s survey, 73 percent of those who reported they had left a company because of bad service cited “rude staff” as the problem. And 51 percent said support tech that wasn’t knowledgeable was the cause for defection.

Rudeness is hard to quantify, and thus, companies that rely on metrics to determine the quality of their service often fail to pinpoint this as a sore point for customers. But I can think of a few companies I deal with regularly that always manage to send personable, helpful, and pleasant people to interact with me. (FedEx is one.)

Maybe instead of massive ad campaigns, companies should invest in etiquette training and knowledge workers who know how to smile pleasantly and say please and thank you? It could be the difference in retaining a satisfied customer willing to continue paying more for support and losing one.

Got gripes or questions? Send them to christina_tynan-wood@infoworld.com.

This story, “The subtle art of retaining customers,” was originally published at InfoWorld.com. Read more of Christina Tynan-Wood’s Gripe Line blog at InfoWorld.com.