Indian customer willing to pay premium for 'excellent service': AmEx study

The findings of the American Express Global Customer Service Barometer suggest that 78% of Indian consumers have spent more with a company because of history of positive customer service experiences

BestMediaInfo Bureau | Delhi | October 28, 2014

Businesses in India can reap the most rewards by providing excellent service, as 78% of consumers have spent more with a company because of history of positive customer service experiences, according to the findings of the American Express Global Customer Service Barometer. The survey also indicates that this trend is picking up as 86% of Indian customers have expressed willingness to spend 23% more with a company they believe provides excellent customer service, as against the global average of 66% who are willing to spend 12% more.

In addition to spending more, 66% of the survey's respondents say that they always tell others about good service interaction, telling an average of 41 people. According to the study, recommendations from friends or family members is amongst the most likely ways to get 22% Indian customers to try a new company, behind a company's reputation (33%) -  which is impacted by the service they provide.

“Businesses can build advocates by delivering outstanding service, and companies that do this consistently understand that exceptional service is a real competitive advantage. The highly-networked Indian customer presents a phenomenal opportunity as he wields a wide sphere of 'word of mouth' influence, and is also willing to pay a premium to companies providing great service. So, focussing on delivering outstanding service will ultimately help companies to grow,” said Sanjay Rishi, President, American Express South Asia.

The American Express Global Customer Service Barometer, a flagship survey conducted across 10 countries, suggests that companies will need to continue giving importance to their engagement with customers, given the influence of recommendations as most trusted in India, as against other markets. Indian consumers tell significantly more people, on an average, about their customer service experiences, both good and bad, as against their counterparts in other markets. While 66% of Indians are likely to talk about their good experiences to an average of 41 people (global average of 41% talking to only nine people), about 50% talk to 48 people about their bad experiences.

“Your customers are telling others about their service experiences. In fact, they'll spread the word to more people than any other country in our study,” Rishi stated. “Recommendations from others and a company's reputation are truly driving consumer behaviour, so it's important for businesses to create good customer service experiences,” he added.

Even in a digitally connected world, consumers' preferred method for talking about their service experiences is still face-to-face conversation. Nine in ten consumers say they tell others face-to-face about their service experiences – good or bad. While 83% are using social networking sites to talk about customer service, followed by online chat/instant messaging (81%), company websites and consumer review websites (74%) and text messages (73%).

While the reward for providing great service continues to climb, so does the cost for getting it wrong. Indians are also most reactive to poor service with 71% consumers having dropped a transaction or an intended purchase because of poor customer service, versus a global average of 55% consumers.

However, 66% Indians are willing to give companies a second or more chances when faced with a poor experience, as against customers in Japan (52%), Italy (45%) and Mexico (44%), who say that companies do not get a second chance to make a good impression when it comes to customer service. The remaining 34% Indians consider switching immediately after a bad customer experience.

Though majority of survey respondents say that a personalised service experience is important to them and they want to be thanked for their business, the ticket to entry in providing great service is first taking care of the customer's needs.

What qualifies as 'excellent' customer service for Indian consumers are the customer care person's abilities to provide satisfactory answers (79%); or being connected to someone knowledgeable (63%). Once these core expectations are met, personalisation (58%) and appreciation (49%) are pivotal to an excellent customer service. Customer care professionals can further seek to distinguish themselves through attributes like efficiency (34%), consultative approach (22%) and empowerment (18%). On the other hand, companies can strive to exceed consumer expectations for customer service, by delivering promised value at the right price (27%).

“A personal touch is important to almost everybody, as long as you start by effectively addressing the customers' needs,” Rishi said, adding, “Customers prefer engaging with service professionals who can handle their request efficiently and without many transfers. Part of our Relationship Care service culture is teaching our customer care professionals to put the customer's needs first.”

According to the survey, when it comes to their willingness to wait in-person or on-hold on the telephone for customer service, the most patient consumers, on an average, are in India (wait in-person for 20 minutes, wait on-hold for 18 minutes), versus counterparts in other markets (average wait in-person for 14 minutes, on-hold for 12 minutes).

Customers want choice in how they connect with companies, revealed the survey. Many customers prefer to handle simple inquiries themselves, but as issues become more complex, they tend to prefer contact with a real person.

About half of Indians said that their preferred channel for simple inquiries is one of several self-service tools, such as a company website/e-mail (18%), speaking with a 'real person' (12%), an automated voice response system (11%) or a smartphone app (12%). For more complex inquiries like returning a product or handling product issues, 25% prefer a phone call with a real person and 13% want to speak to someone face-to-face. And for even more difficult issues, such as making a complaint or disputing a charge, Indian consumers prefer a real person to help them, either on the phone (22%) or in person (21%).

Social media is growing as a channel for those seeking a customer service response, but is mostly used to praise good service or vent about a poor experience. 71% of Indian consumers have used social media to get a service response, a significant increase from 54% in 2012.

“Customers in India are increasingly vocal about their experiences, and choose to leverage multiple channels of communication. According to our study, businesses in India need to deliver customer care in a redefined manner and be highly responsive across all channels, in order to keep the customer engaged and loyal, or risk losing them,” Rishi observed.

The American Express Global Customer Service Barometer research was completed online among a random sample of consumers aged 18+ years, in 10 countries, including India, United States, Canada, Mexico, Italy, UK, Australia, Japan, Singapore and Hong Kong, with a sample size of 1000+ respondents in each country. The interviewing was conducted by Ebiquity in August, 2014. Overall, the results in each market have a margin of error of +/- 3.1 percentage points at the 95% level of confidence.

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