Returned products, social networking sites and word-of-mouth communication all increase the financial burden of poor consumer experiences

This article is brought to you by Retail Technology Review: Returned products, social networking sites and word-of-mouth communication all increase the financial burden of poor consumer experiences.

Consumers are becoming increasingly proactive in the way they deal with companies following a poor customer experience. Thats the conclusion of the Customer Experience Impact Survey, a Harris Interactive study commissioned by RightNow. Now in its fourth year of analysis, the study found that 44% of consumers have returned goods as a countermeasure to poor experiences, a 5% increase on the previous year.

The Impact of Poor Customer Experiences: As well as consumers returning products to proactively address poor experiences, the study also found that 72% of UK consumers have reacted to their ill treatment by boycotting the organisation at fault clearly both measures have financial ramifications for businesses. While swallowing the cost of product returns, refunds and customer churn, organisations also need to consider the viral impact of poor consumer experiences. 95% of consumers use word-of-mouth to tell others about their treatment, however, consumers also use the social web to communicate their displeasure. The study found that 20% have posted a negative review on a companys website while others have posted commentary on Facebook or blogged about their experiences.

Consumer Control: Organisations ignore the social web at their peril. Recent examples of consumer empowerment through the social web have been well documented. Pressure groups dedicated to changing company policy have sprung up on Facebook, many have been successful in accomplishing their goals, resulting in highly publicised company u-turns. Meanwhile, individual consumer campaigns, like Dave Carroll, of United breaks guitars fame, on networking sites like YouTube have allegedly wiped millions of dollars from company share prices.

Social Service: However, the study also found that websites such as Twitter and Facebook can be a useful channel for repairing customer service problems. 59% of respondents said that if they post complaints on a social networking site they would like the company in question to contact them with a response. Social sites can also help build trust and advocacy among consumers. For instance, 53% of UK adults follow brands on Twitter to get tips or advice and 39% do so purely because they love the brand and want to be part of its community.

Agents as Trusted Advisors: Phone-based customer care is still the preferred interaction channel however; 71% of consumers still opt to speak directly with a customer service agent. Handled correctly theres opportunity to drive additional revenue while speaking with customers on the phone. 43% of consumers said they had interacted with an organisations customer service department and then purchased an item complementary to other products they own. A further 31% bought an item because they trusted that the service agent was being honest about the offer and so made a purchase.

Expect More and Pay More: Even though todays consumers are empowered by an arsenal of social options to publicise their discontent when service interactions fall short of their expectations, in a down economy 87% of consumers will still pay more for a better customer experience, up from 81% in 2008. The provision of outstanding service is also still one of the top three reasons people will recommend a company to someone else.

Commenting on the survey results, Joe Brown, general manager, RightNow EMEA, said: Never mind the old adage, the customer is king; high expectations and wide spread empowerment through social networking sites means that what were witnessing now is a consumer revolution. Increasingly, control is shifting from company to consumer, who demands an experience that works for them at the point and time of requirement, through their preferred channel of communication. The onus is on organisations to make each of those interactions exceed expectation or forfeit future business and run the risk of widespread viral detraction.