A lot of talk lately has centered on how social media and other state-of-the-art digital communications technologies are making it easier, faster and less expensive for companies to reach customers. And companies have invested in these new media as well, even building 24/7 monitoring teams to identify any potentially negative chatter. So it must follow then, that customer service has improved proportionally. But has customer service really improved – from the customer’s viewpoint?

American Express recently completed a survey of consumers and found that regardless of technology, resources or access to multiple modes of 24/7 communication, customers’ assessment of service has not improved. As Michael Hess, of CBS Moneywatch writes, “Do you think your customer service is more on point than ever? That the cutting-edge technology, you've put in place has brought your customer game to a new level? That your self-help processes make it easier and more frictionless than it's ever been for customers to get their needs met, and issues resolved? Well, there's a good chance you're wrong.”

We at Polaris Marketing Research are not surprised by these findings.

In 2011 and 2012, we conducted a study of American consumer perceptions of customer service, supported by Research Now for data collection and analysis. We found that significantly more respondents agreed with the statement “customer service is getting worse” in 2012 than in 2011 (37 percent in 2012 vs. 33 percent in 2011). Significantly fewer respondents believed “customer service is getting better” and about the same percentage believed “customer service is staying the same.

The Polaris surveys and the Amex survey both found that most people will spend more -- significantly more -- for better service. In 2011 and 2012, about one-third of the respondents said they would be willing to pay more for better service. Additionally, the number of respondents definitively saying they would not be willing to pay more for better service decreased significantly (30 percent in 2011 vs. 27 percent in 2012).

Two years later the Amex survey found that two-thirds of consumers said they are willing to spend more with a company that provides excellent customer service, and the premium they're willing to pay is 13 percent over the regular price, on average. This continued increase in willingness to pay more for better service is another indication of the general decline of customer service.

It was interesting that perceptions of declining customer service had not impacted how loyal consumers perceived themselves to be. In 2011 and2012, 72 percent of respondents said their loyalty was best described by the statement, “If a company treats me right, I tend to be loyal to them.” Further, online Americans do not believe their levels of loyalty have changed compared to pre-2011 and 2012, with most agreeing that the statement “I am as loyal to companies now as I was four years ago” best described them (58 percent in 2011 vs. 62 percent in 2012).

There used to be a rule of thumb that a satisfied customer tells two people, while a dissatisfied customer tells ten. That rule may have changed because social media and digital communications have changed customer service is to make it far, far easier and popular to complain about bad service or praise good service. On average, customers now tell 15 people about their good experiences and 24 people about their bad ones, while nearly half of consumers always tell others about good customer service experiences, as reported by Amex.

The bottom line is the same as it ever was: good customer service pays. And whether it is face-to-face or via social media, fast, responsive, personal, and most of all, effective customer service is what consumers deem great customer service. So while the punishment for bad service and the reward for good service may be amplified by the availability of social media and digital communications technology, the fundamental requirement for companies to deliver great customer service still results in greater profit and customer loyalty.

About the Polaris study

Polaris conducted online surveys with a representative sample of 1,000 American consumers during the week of June 20, 2011 and again with 1,215 Americans during the week of August 29, 2012.

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