Indians will spend 11% more with companies that provide excellent service

Company Brief

New Delhi, July 7, 2010

A majority of Indians report that quality customer service is more important to them in today's economic environment (82%) and will spend an average of 11% more when they believe a company provides excellent service. 77% cite poor customer service experience as a deterrent for repeat business and nearly two thirds (65%) Indians believe that companies have increased their focus on providing quality service in this current economy:

* 12% feel businesses have not changed their attitude toward customer service.

* 21% say that companies are now paying less attention to good service.

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

According to Pradeep Kapur, VP & GM, World Service India, American Express, "In a globally competitive market environment, the differentiation often turns out to be superior service and our survey highlights this as the most crucial factor driving consumer engagement and delight. Customers want and expect high-quality service, especially as they focus on getting good value for their money in a difficult economic environment and are willing to spend more with those that deliver excellent service – suggesting substantial growth opportunities for businesses that get customer service right. Businesses should consider strategies to fullfill this most critical aspect. This is the bedrock of successful and trusted brands the world over."

Almost All Agree Service is Important, But One in ten Feel They're Taken For Granted

The study reveals that nine in ten Indians (89%) consider the level of customer service important when deciding to do business with a company, with three-quarters (74%) believing it to be 'very important'. Infact, two in five (39%) respondents think that companies value their business and will go the extra mile for them' However, significantly more consumers –over half –believe that while companies may be helpful -

* 48% feel that companies are helpful but they don't do anything extra to keep their business

* 9% think 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 much more inclined to tell a friend about a positive experience than complain about a negative one.

* 95% are likely to speak positively about a company after a good service experience in contrast with 77% who are likely to speak negatively about a company after poor service.

Good customer service experiences also carry more weight than bad ones when Indians make future buying decisions.

* 94% consumers are likely to give a company repeat business after a good service experience than the 85% consumers who are likely to never do business with a company again after a poor experience.

In fact the three most influential factors for consumers when deciding to do business with a company are all related to the customer service experience. Most Indians find personal experience (95%), a company's reputation or brand (95%), and recommendations from friends and family (86%) to be very or somewhat influential. Amongst 76% of Indians, the consumer's personal experience is considered to be very influential while deciding to do business – which is much higher than those who find the company's reputation or recommendations from friends/family to be very influential.

But when customers go online, the rules change. As many as four in five Indian consumers (80%) state that they regularly use consumer reviews, blogs or online postings to gauge a company's reputation for customer service.

While one third (33%) of consumers indicate a posting about a poor experience has a lot of influence on their decision, only one quarter (25%) found a posting about a good experience to be as influential.

"The Internet has made customer service quality more transparent than ever before," Mr. Kapur said. "In the online space, positive recommendations are important, but people often surf for 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. Listening to customers carefully, anticipating their needs, and resolving any issues quickly and courteously can help make the difference."

Two Strikes and You're Out

A negative service experience is decisive for a majority of Indians: 77% have decided never to do business with a company again after a poor customer service experience. And two-out-of-five Indians (39%) allow 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. 86% consumers are willing to give a company a second chance after a bad experience if they've historically experienced great customer service from that company.

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

* Six out of ten Indian consumers (63%) expect something in return after a poor customer service experience,

* Beyond resolving the problem, most consumers (68%) want an apology

* While over half of consumers say that companies can win back their business by offering free products or services (55%) or a discount/coupon (51%).

Service is Valued Everywhere, But Views Vary Globally

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

But India also leads other countries in the belief that companies have increased their focus on providing good customer service in today's economy (65%), ahead of other countries like:

* 49% of Japanese and 47% of Mexican consumers and 37% Americans

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 changed their attitudes towards service or are paying less attention to it.

This is striking given that consumers around the world generally express a willingness to spend more with companies that provide excellent service.

For further information, please contact:

American Express

Vibha Bajaj

Mobile: +919810900112