An analysis of 2497 consumer reviews. How good and bad customer experiences impact business ratings in seven major cities across the USA.
Customers care more about customer service today than ever before; it’s now a huge driver in determining where people spend their money. In a recent survey, we found that 82% of people have stopped doing business with at least one company based on a single instance of poor customer service.
When it’s easier than ever for consumers to switch to a competitor, it’s never been more important for companies to prioritize support.
While we know customer service is important to every customer, everywhere, we were curious if there is any variation of just how important it is based on where you live. Despite the abundance of research touching on people’s behavioral differences in different regions of the United States, we could not find any original studies that answered the question: How do Americans in different regions feel about customer service?
So we decided to run an experiment ourselves, specifically focusing on the impact of customer service in retail.
Why is customer service important in the retail industry?
Retail businesses have been a cornerstone of American culture. The U.S. was home to the first-ever outdoor mall and, up until the last decade, 30% of the almighty US dollar was made from scraps of Levi’s denim jeans. While a lot has changed in retail, (think chatbots in retail, ecommerce chatbots, or even just the internet itself) the core tenant to provide excellent customer service remains paramount. In fact, studies have shown U.S. consumers tell almost twice as many people about bad service compared to good service.
It’s no secret, the onset of internet adoption has sparked massive transformation. Competition is more intense and customers’ voices are more amplified than ever before. Now retailers have to pivot the way they run business operations – those that cannot are finding it difficult to survive. In fact, if you search “Retail in America” you’ll find Wikipedia’s Retail Apocalypse page as one of the top results.
Now, more than ever, retailers must rely on every advantage they can to stay in business and out of bankruptcy. Increasingly, the most important advantage comes from providing superior customer service.
Our research yielded three intriguing and statistically significant results. But before we dive into our findings, it’s helpful to understand the research and data collection methodology.
Research and Data Collection Methodology
There were a few predictions thrown around speaking to the stereotypes of “Southern Hospitality” and the emotional coldness of New York. Ultimately, we decided to make our hypothesis as simple as possible, that there would be a measurable difference amongst the regions of the United States.
The first order of business was to figure out how we would divide the country. We found a consensus online that broke the continental United States into seven major regions: West, Northwest, Southwest, Midwest, Southeast, Mid-Atlantic, and Northeast.
Next, we analyzed ratings of a major clothing retailer in the largest city for each region in the continental U.S.). We looked at five-star and one-star reviews to see how people in different cities were rating the retailer.
Customer Service in the United States of America – Results
We analyzed 2497 reviews from 7 of the largest cities in the United States. Here’s what the data shows:
Customer service was a major factor in more than one third of all “most relevant” and 5-star ratings across the country (39% and 35.2%, respectively). While customer service was mentioned in over 50% of all 1-star reviews (52.8%).
Customer Service Opinions By City
Customer service is most important to consumers in Los Angeles
Customer service experiences carry a lot of weight in Los Angeles. Google’s default ranking algorithm sorts reviews based on how helpful they might be to prospective shoppers. Sorting by relevance, 80% of Los Angeles’ top 10 reviews cite quality of customer service – 54.8% higher compared to other cities.
Bad customer service matters most to consumers in Seattle
Bad customer service experiences had the most influence on 1-star reviews in Seattle. In fact, customer support issues are over twice as prevalent in 1-star ratings compared to other cities. 90% of Seattle consumers’ 1-star reviews cite quality of customer service – 104.5% higher compared to other cities.
Good customer service matters least to consumers in Boston
In Boston, good customer service experiences have the least impact on 5-star ratings. Only 20.8% of 5-star ratings mentioned customer service – 48.9% less prevalent in 5-star ratings compared to other cities.
What matters most with customer service?
According to John Formica, The “Ex-Disney Guy” and a customer experience expert, “There is no doubt that customer experience is the next competitive battleground. It is where some businesses will be won or lost. In 2020, the customer experience and the emotional connections it brings will be a strong competitor over price and product. Those businesses that are in a position to demonstrate a positive customer experience to their customers will have the advantage over those who just provide what is now expected customer service.”
In today’s world – friendliness, pleasant and effortless experiences are what people expect. They make buying decisions based on the interactions they have with a company. Consumers are loyal to companies that provide good experiences – and abandon companies based on one single instance of bad customer service.
We found that despite positive comments, a negative customer service experience often drives a person’s rating to the lowest possible number of stars. It’s clear that one instance of a poor experience can completely ruin how a person rates a company. This is so critical for companies to understand.
John Formica continues to say, “ Customers expect a good experience. If not they will go elsewhere and they usually do. Businesses need to put themselves in the shoes of the customer. It makes me cringe when companies don’t look at what their customers see every day in regards to being reliable and responsive. Common sense is not always common practice.”
In 2020, customer service in- and out-of-store will be the key to growth and customer loyalty. As we see in our analysis of reviews, instances of customer service directly correlate to how a person views a business and indicates future spend.