Americans Will Spend 9% More With Companies That Provide Excellent Service

—But Two-Thirds Feel Companies Aren’t Doing Enough to Earn Their     Business—

—Service Is Even More Important in Tough Economic Times—

NEW YORK—A majority of Americans report that quality customer service is more     important to them in today’s economic environment (61%) and will spend     an average of 9% more when they believe a company provides excellent     service. However, in a challenging economy where growth is harder to     achieve, many businesses are missing out on this opportunity.  Although     only a little more than a third of Americans (37%) believe that     companies have increased their focus on providing quality service:

• 27% feel businesses have not changed their attitude toward customer       service.
• 28% say that companies are now paying less attention to good       service.

These findings were released today in the American Express Global     Customer Service Barometer, a survey conducted in the U.S.  and     eleven other countries exploring attitudes and preferences toward     customer 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.”

Almost All Agree Service is Important,      but One in Five Feel They’re Taken for Granted

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. Most feel businesses can do more to     retain their loyalty:

• 48% feel companies are helpful but don’t do anything extra to keep       their business.
• Worse, 21% believe that companies take their business for granted.

Good News Travels Fast – Until You Go     Online

Importantly, customers are spreading the word willingly and widely 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     speak positively 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, 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).

“The Internet has made service quality more transparent than ever     before,” Mr. Bush said. “In the online space, positive recommendations     are important, but people often give more weight to the negative.      Because consumers can broadcast their views so widely online, each and     every service interaction a company has with its customers becomes even     more crucial. Developing relationships with customers, listening to     them, anticipating their needs, and resolving any issues quickly and     courteously can help make the difference.”

Two Strikes and You’re Out. Or       Is It One?

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.

But companies who get it wrong should realize it’s at a cost.

• Half of consumers (52%) expect something in return after a poor       customer service experience, beyond resolving the problem.
• Most consumers (70%) want an apology or some form of reimbursement.

Service Leaders Recognize the Value

Companies with reputations for great customer service take different     approaches, however they share the common understanding that investing     in service truly pays off.

“While customers appreciate the plush surroundings of our five-star     hotels, we know that luxurious touches don’t matter to guests unless the     service surpasses the setting,” said Simon Cooper, president, The     Ritz-Carlton Hotel Company LLC. “Trends may change, but a focus on       service excellence is timeless.”

“What many people refer to as ‘great service’, we call hospitality,”      says Susan Reilly Salgado, managing director of Danny Meyer’s learning     business, 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.”

“By focusing on our company culture, we’ve been fortunate to hire great     people where providing great service is in their DNA. We always have     been and continue to grow through word of mouth. If you treat the     customer how they should be treated and form personal connections with     them, they’ll want to tell others about it,” said Aaron Magness,  senior     director, brand marketing and business development, Zappos.com.

Service is Valued Everywhere,  but     Views Vary Globally

Similar to their U.S. counterparts, a majority of consumers in all but     one country surveyed feel that customer service has become more     important in the current economy:

In most countries where the highest percentage of consumers feel that     service is more important today, there is a corresponding belief that     companies have increased their focus on providing good customer service.

• 65% of Indian, 49% of Japanese and 47% of Mexican consumers agree with       this statement.

However, some consumers are not feeling the love. In Australia (71%),      Germany (66%), and Canada and Italy (65% each), consumers say they feel     companies haven’t increased their focus on service or are paying less attention to it.

This can spell trouble and lost opportunity for companies, given that     consumers around the world consistently express a willingness to spend     more with companies that provide excellent service.

Average Percentage More That Consumers Are Willing to Spend

About the American Express Global     Customer Service Barometer

The American Express Global Customer Service Barometer research was completed online among a random sample of 1,000 U.S.      consumers aged 18+. Interviewing was conducted by Echo Research between     April 13 and April 20, 2010. Overall, the results have a margin of error     of +/- 3.1% at the 95 percent level of confidence. The same survey       methodology was used in Canada, Mexico, France, Germany, Italy,  the     U.K., Spain, the Netherlands, Australia, India and Japan.

About American Express

American Express is a global services company, providing customers with     access to products, insights and experiences that enrich lives and build     business success. American Express is a three-time consecutive winner of     the J.D. Power Award, has made two consecutive appearances on the     BusinessWeek “Customer Service Champs” list and is a recipient of the     2010 Forrester Research Voice of the Customer Award. The Company has     also been awarded the Call Center of the Year Award from ICMI for its UK     Service center, received the National Award for Excellence in Customer     Relationship Management and Contact Centers from the Mexican Institute     of Teleservices, and been named the winner of the Customer Experience     Category of the Netherlands National Contact Centre Awards. Learn more     at www.americanexpress.com and connect with us on www.facebook.com/americanexpress,      www.twitter.com/americanexpress and www.youtube.com/americanexpress.