Consumers bail on online sites with bad customer service

Buyers are quick to not only desert a site but to discourage their friends from shopping there, too

Companies selling products or services online could easily charge more if they just treated their customers a bit better.

That's according to a Harris Interactive study released last week, which noted that 85% of consumers surveyed said they would pay more for a product or service if it would mean better customer service. Of those, 55% said they would pay 10% more, and 10% would pay a whopping 25% more.

"These results show that delivering a positive customer experience can help organizations increase revenue," the report said, which was sponsored by RightNow Technologies, a U.S. company that develops customer relationship management software. "For example, in 2009 Cyber Monday alone generated $887 million in revenue for e-retailers. Based on the results of this study, the industry could have generated an additional $87 million in revenue in just one day by providing superior customer experience."

In the study, which surveyed 2,217 U.S. adults online between June 30 and July 2, 82% of respondents said they stopped doing business with a company because of a bad experience. Of those, 75% said they never returned.

Another 55% said they did business with specific companies solely because of their reputation for "great" customer service, and 40% switched to a competitive brand because of a reputation for "exceptional" service.

According to the report, companies can improve the customer experience by providing friendly, knowledgeable support and by resolving issues in a timely manner.

Zeus Kerravala, an analyst at Yankee Group Research, said he's not surprised that people would pay more or switch brands for a good shopping experience.

"Good customer service means a faster, easier experience," said Kerravala. "You need to think about what your time is worth, and spending extra time buying something to save a few bucks isn't worth it. Basically, people shop where they have a good experience."

So, why aren't more companies focused on offering customers that great experience? "It shouldn't be that hard, but for many online experiences, it seems to be," said Kerravala. "It's hard to build that good experience. It requires integration of multiple systems."

No matter how complicated it is to develop a great customer service experience in an online store, businesses need to get it done. The study showed that 79% of consumers who have had a negative customer service experience said they told other people about it. And 66% of those said they wanted to discourage others from doing business with that company.

So, what makes people stop doing business with a company? According to the survey, 73% will walk away because of rude staff, 55% said they were done in by issues that weren't resolved quickly, and 51% couldn't tolerate staff who aren't knowledgeable.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is

Copyright © 2010 IDG Communications, Inc.

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