Returning to Shep Hyken’s Achieving Customer Amazement 2021 report this week, let’s take a look at how much consumers value quality customer service. To begin, let’s consider this number: a 52% majority of people reported that they were willing to pay more if it meant they would receive a higher quality of customer service.
In other words, more than half will accept that one business costs more than another—if that business can provide a higher quality customer experience. And these numbers hold true across most industries. According to Hyken’s research, customers of businesses in hospitality, retail, healthcare, automotive, insurance, airlines, and financial services all clocked in with 51% or higher willingness to pay a premium for excellent customer service.
The question then becomes, how much more? Again, these numbers are quite consistent across each of the aforementioned industries, with more than a quarter of all respondents willing to pay up to 1–10% more, a tenth willing to pay up to 11–20% more, and a fifth willing to pay anywhere from 20–31% or greater. As Hyken observes, “over half of your customers put service over price, emphasizing that price is less relevant.” Put into a grander perspective, he says, “customer serviced a good CX are table stakes. If you don’t deliver, you risk losing customers.”
Two weeks ago, we discussed how age impacted what customers valued most in their experience, weighing factors like employee empathy and knowledge, as well as the ease of shipping and delivery. When it comes to each generation’s willingness to pay more for what they value most, there are some noteworthy differences to cover:
Among Gen-Z (18–25), 61% are willing to pay more for great customer service. In second place, Millennials (26–44) come in at 57%. Gen-X (45–56) and Baby Boomers (57+) come in at 53% and 35% respectively. One of the key takeaways is that the younger your clientele, the more emphasis they place on the experience. But even if your target demographic skews older, a sizeable percentage of Baby Boomers still cares enough to pay a premium. As the years pass by, those younger generations will eventually age into an older demographic anyway, and they’ll bring along their higher expectations. So, you might as well get ready.
Another consideration in the report is how much a customer’s income impacts his or her willingness to pay more for quality, with all income brackets over 50% except for those making less than $20,000 per year (as you might expect). Leading the way is the $100–149k group, among whom 62% are willing to pay more. But even 45% of the unemployed believe that high-quality customer service is worth paying extra.
So, what does this all mean for your business? The numbers don’t lie: investing in your customer experience, from how well your employees treat your customers to how convenient your sales and delivery processes are, is really important. So, if employing smart, well-motivated people means you have to raise your prices some, then you’ll find that the majority of customers will gladly pay it. But even more importantly, customers who are discerning enough to pay extra for quality are also more likely to be sticky, rewarding your effort with repeat business and also recommending you to their family and friends.
But what about the risk of losing some customers to lower-priced competitors? Even if you were to lose some, rest assured they were never all that loyal to your business to begin with. As soon as a competitor undercuts you, they’d be gone anyway. In other words, a business should strive to be the best, not the cheapest, for the sake of its long-term viability.
Gauging your company’s level of customer care, the effectiveness of its merchandising, and the efficiency of its sales and service processes can be complicated. To get honest feedback, you need someone to come in and look with a fresh set of eyes. You need world-class mystery shopping.
Let The Brandt Group help you develop the best customer experience possible, so you can pursue more revenue and greater customer loyalty. It doesn’t cost anything to chat. Either call us at 406–586–3036, or use this contact form now. Let’s work together to build a customer experience that everyone values, starting today!
