#custserv cost

Paying More for Better Customer Service, Are You Sure?

I would pay for better customer service.” Have you heard or ever said that declaration? It comes up time to time in service-related conversations. Hell, Oracle Media Relations released a European study last year that stated “81 per cent of shoppers are willing to pay more for better customer experience.” On this side of the pond, in an American Express Global Customer Service Barometer, it was found two thirds of consumers say they are willing to spend more with a company they believe provides excellent customer service. That’s a lot of people willing to shell over more money to be treated better than they feel they are currently being treated.

So, would you spend more to get more? (unless you took these surveys and then we already know the answer). I’m going to put my journalism hat on for a moment and get all “W5” on this.

WHAT are you offering? It must be something you weren’t offering before. And please don’t say you’re offering “better customer service” because that implies it was “worse service” before. Perhaps your business is looking to improve access to support (speed or availability) or add service features…but they have to be worth it in your customers’ minds for them to pay more.

WHO are offering this better customer service? Hopefully, it isn’t companies that were already giving bad service. Why should people trust them to provide something they couldn’t provide before?  It’s important to understand not only who you are as a company that believes they can charge their customers more, but also who your customers are. If they aren’t the type of people to spend on the extras, your business needs to know that.

WHY should the customer pay more? Isn’t your responsibility as a business to provide a great service or product that will have customers coming back again and again? I’m assuming people are already paying a competitive cost for what you provide, and let’s face it, cost is a common factor when making buying decisions. If you can’t answer this question for your company, how can you expect your customers to know?

WHEN do your competitors capitalize on this opportunity? Come on, you’re now charging for people to get better support or access more service features, so why wouldn’t other companies offer your customers the same services for less…or for free? Your company is looking at this as an opportunity to make more money, well so is your competition.

WHERE will charging more for better service be successful? What industry is finding success in having customers pay more? Here are a few in the “for” and “against” columns:

Yay Story

Zappos isn’t the only online shoe store and they do charge more, but people still spend the extra money because the company offers a better customer experience. Amazon certainly isn’t the cheapest alternative to buying your books, electronics and other various knick knacks, but they keep taking in your business. So is it an online thing? Nope. Time Warner, Apple and airlines United, American and Southwest all charge a little extra and seem to be reaping the rewards.

Nay Story

On the Blue Sky blog, they argue that if customers were really willing to pay more, “Virgin America should be enjoying large profits. I’m sure they would even like to see slight profits!” while budget airline Spirit continues to get business even though they “offer “’no-frills’ and have badly reviewed customer service”. Irish airline Ryanair has a similar reputation for “no frills” service, even going so far as to have a customer service-adverse CEO, but they still continue to operate.  The Blue Sky blogger argues that customers choose with their wallet, not on the level of service.

On Parature’s blog, in response to American Express’s Barometer, they asked if businesses will spend more on customer service when it’s been shown that customers will? I guess the bigger question everyone, both businesses and customers alike, has to answer is if we do spend more money on better customer service, what exactly are we spending it on? And again, please don’t say “better customer service”, I want details for my dollar.

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