Americans will spend 9% more when given excellent service

Global consumer research by American Express in April of this year found that a majority (61%) of Americans reported that quality customer service is even more important to them in today’s economic environment and they will spend an average of 9% more when they believe a company provides excellent service. However, in this challenging economy, many businesses, including many FECs and location-based entertainment centers, are missing out on this opportunity. Only a little more than a third of Americans (37%) believe that companies have increased their focus on providing quality service.

"Customers want and expect superior service," said Jim Bush, Executive Vice President, World Service. "Especially in this tight economic environment, consumers are focused on getting good value for their money. Many consumers say companies haven't done enough to improve their approach to service in this economy, and yet it's clear they're willing to spend more with those that deliver excellent service – suggesting substantial growth opportunities for businesses that get customer service right. It's important to see customer service as an investment, not a cost."

Not surprisingly, nine in ten Americans (91%) consider the level of customer service important when deciding to do business with a company. But only one-quarter (24%) believe companies value their business and will go the extra mile to keep it

Fortunately, customers are willing to spread the word far and wide when they experience good service. In fact, contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to spread positive word-of-mouth about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service. Good service experiences also carry more weight than bad ones when Americans make future spending decisions. Consumers are far more likely to give a company repeat business after a good service experience (81%) than they are to never do business with a company again after a poor experience (52%).

In fact, the research found that consumers say the three most influential factors when deciding which companies they do business with include personal experience (98%), a company's reputation or brand (92%), and recommendations from friends and family (88%). Nearly half (48%) of consumers report always or often using an online posting or blog to get others' opinions about a company's customer service reputation. But when consumers go online they're looking for "watch outs," saying they put greater credence in negative reviews on blogs and social networking sites than on positive ones (57% and 48%, respectively).

A negative service experience is an important factor for most Americans: 81% have decided never to do business with a company again because of poor customer service in the past. When asked how many poor experiences they allow, half of all Americans (50%) reported it takes two poor service experiences before they stop doing business with a company.

Importantly, consumers are far more forgiving if a company has earned their trust over time. Almost nine-in-ten consumers (86%) report they're willing to give a company a second chance after a bad experience if they've historically experienced great customer service with that company.

"What many people refer to as ‘great service', we call hospitality," says Susan Reilly Salgado, managing director of Hospitality Quotient. "Service is all about the technical delivery of the product, while hospitality is about how guests feel during that transaction. Hospitality happens when guests believe you are on their side. For people to rave about their experience and become repeat customers, you need to have both - but what surprises customers and makes them feel genuinely cared for is the hospitality. And that's the reason people love to talk about those fantastic experiences – because they surpass expectations."

Of all the countries surveyed, good service is most important in India, where 82% of consumers said customer service was very important and they are willing to spend 11% more with companies that provide excellent service.

Average amount more consumers said they would spend with companies that offer excellent service.