An interesting thing about research is that data often shows the truth to old sayings. A new study showed that business owners truly only have one chance to make a good impression. LoyaltyOne and Verde Group released a study that found four out of five consumers won’t give retailers a chance to fix a mistake.
A study of 2,500 U.S. consumers found that nearly half of consumers have experienced a problem when they shop, but only 19 percent of consumers will tell the retailer to give them a chance to address the issue. Four out of five (81%) consumers who have a bad experience do not provide feedback
According to Dennis Armbruster, VP and managing partner at LoyaltyOne, “The results are a resounding confirmation that poor customer experiences have a considerable negative impact on shopper spend and attrition, which can run into the billions”.
The researchers noted some of the ways that these unsatisfied customers can cost retailers money. Among these silent shoppers, about one in three (32%) said they were unlikely to recommend the retailer to friends and family, putting these shoppers at-risk of decreasing their spend with the retailer.
The study also found that customers who spend the most are the most likely to be annoyed by a negative experience. Shoppers frustrated by check out wait times reported spending 23 percent more than the average mass retail customer ($545 vs. $446 a quarter).
Department stores should be concerned about the attitude their employees show. Shoppers troubled by an associate’s not-my-department attitude reported spending twice as much as the average department store customer ($543 vs. $261 a quarter).
For online retailers, shipping was a common concern of high spenders. Customers who cited their inability to obtain a specific date or time to receive an online order reported spending 66 percent more in the category ($416 vs. $250 a quarter).
The researchers calculated how much unsatisfied customers could potentially cost per businesses based on their industry:
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Mass merchandisers are putting 25 percent of potential revenue at risk.
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Apparel retailers are putting 16 percent of potential revenue at risk.
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Department stores are putting 15 percent of potential revenue at risk.
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Drugstores are putting 12 percent of potential revenue at risk.
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Grocers are putting 11 percent of potential revenue at risk.
Problems will happen, but business owners can mitigate the damage by encouraging customers to let them know and fix issues. Shoppers who did notify retailers of their poor experience and had their problem completely resolved were 84 percent less likely than silent shoppers to be at risk of decreasing their spend.
This research shows the importance of proactive customer service. Business owners who assume that all customers who don’t complain are satisfied are potentially losing a lot of business. There are several ways business owners can encourage consumers to bring up issues they have, like buttons suggesting customers ask questions. Business owners should also make sure that there employees know the importance of presenting a positive attitude when they interact with customers. For online retailers, they can prevent customer dissatisfaction by providing a lot of shipping options and being upfront about common questions with the products.
For more information about the value of customer service, read this article on a recent study on what millennials want from customer service options.
