Research Shows How Companies Can Reduce Friction With Customers
By Deborah L. Vence
A new whitepaper reveals how companies can reduce friction during the customer journey to help drive brand loyalty.
Available to attendees at the Card Forum conference in May, the whitepaper was commissioned by Connexions Loyalty, a company that specializes in customer loyalty programs, and based on research firm Ipsos Public Affairs that showed that the size and type of compensation offered goes a long way toward determining whether a customer will give a company a second chance and how apologizing for a bad customer experience can have an impact on brand loyalty.
Some key points for financial institution customers include the following:
- 48 percent prefer to have a recovery conversation over the phone.
- 60 percent of all negative interactions don't result in compensation.
- 64 percent say they won't stay with a brand if they aren't compensated.
- 91 percent stay with the brand when compensation is appropriate.
- 81 percent say compensation made them feel better about the brand.
- 71 percent say compensation restored their trust.
Additional information from the research showed that nearly seven out of 10 financial institution customers (68 percent) who experienced a service disruption received a call from the offending brand, and 48 percent cited the phone as the tool they would use to initiate a complaint.
Behind phone was in-person outreach at 30 percent, with 28 percent stating that they preferred e-mail and 13 percent opting for chat. Social and text were at the bottom of the list at 11 percent and 9 percent, respectively. Looking at the entire data set, which was segmented by generation, millennials tended toward more digital means, such as e-mail (26 percent) and chat (24 percent).
When it comes to compensation, among consumers who indicated that they had a bad customer experience or a disruption in service, two-thirds (67 percent) indicated that they were offered no compensation at all, and of those who weren't compensated, 60 percent stated that it made them feel worse about the experience. While 60 percent of financial institution account holders received compensation, of those who weren't compensated, 65 percent said the lack of compensation made them feel worse. And, of those who were compensated, one in five (22 percent) stated that they were offered a credit on their bill, 24 percent received a gift card or e-gift, 10 percent received a voucher or coupon and 9 percent were offered merchandise.
Of those who received compensation, 76 percent felt the response was commensurate to the negative experience. Of those who felt the compensation was adequate, nine in 10 (92 percent) said that it made them feel better about the company, reversing what would have otherwise been a negative experience, while more than two-thirds (71 percent) indicated that it helped to restore their trust in the provider.