For retailers concerned with providing strong customer service, one of the biggest obstacles may be learning that there is a problem at all. A new study finds that more than four-fifths of customers who had a negative shopping experience did not contact the retailer about the issue.
The survey, conducted by loyalty consultancy LoyaltyOne
and the Verde Group with Dr. Deborah Small, a professor of marketing and psychology at the Wharton School of the University of Pennsylvania, drew on the responses of 2,500 American consumers. It found that about half of them experienced a problem on their last shopping trip, but of those who had a negative experience, a full 81 percent did not contact the retailer about the issue. Of these shoppers who did not report the problem, 32 percent did not plan to recommend the retailer to friends or family.
On the other hand, respondents who did report their issue and felt the problem was fully resolved proved 84 percent less likely than "silent shoppers" to decrease their spend at the retailer. According to LoyaltyOne, this presents a potential need for companies to encourage shoppers to report their concerns, particularly negative experiences.
"Too many retailers use satisfaction scores from receipt surveys as a means to understand how customers view the quality of their experience," Dennis Armbruster, managing partner of LoyaltyOne Consulting, told Incentive. "You can imagine that if a retailer had a more expansive and precise understanding of customers' bad experiences, decisions around how to invest a multimillion dollar budget would be considerably better informed."
He pointed to the findings that 60 percent of shoppers don't reach out because they feel it is not worth the trouble, while 40 percent worried that it would not do any good. Armbruster said that this suggested that more investment in "removing friction from the contact process and creating moments of truth when customers do reach out" -- and using incentives to do so -- could mitigate these issues.
"This could entail incentives for frontline staff, managers, and customer service reps who resolve issues," said Armbruster. "Or it could involve surprise and delight rewards for customers when they do make their problems known. Our research indicates that successfully resolving an issue leads to a considerable increase in customer loyalty and value."
At the same time, he emphasized that retailers should proceed with caution in creating any consumer incentive programs aimed at encouraging this information gathering.
"We don't believe retailers are actively silencing their shoppers, but also wouldn't recommend consumer-facing incentives that reward for criticism," said Armbruster. "It's a very slippery slope that could lead to shoppers creating problems where there are none."