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Does Good Customer Service Matter For the Price Sensitive Customer?

Lia Winograd
By Lia Winograd on Sep 19, 2016 2:31:19 PM

The stats are loud and clear, and we’ve heard them over and over again: the cost for bad customer service is high. “78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience”, according to American Express. It also takes “12 positive experiences to make up for one unresolved negative experience”, says Ruby Newell-Legner. However, my experience flying an airline this past month made me seriously question these claims.

The Stranded Customer Relies on Social Care

I recently took a flight from NYC to Berlin, on what I thought would be a well-deserved, relaxing vacation. Fast forward a few days, I had to cut my trip short and fly immediately to Colombia. Nightmare alert…I had 24 hours to cancel my original flight and hotel, and book a brand new trajectory. Without service accessible on my iPhone, my options were narrow: spend my Skype credit waiting on the airline’s call center or use social customer service.

My time was limited and my patience running short, so I opted for the second, more convenient alternative. I sent a quick Direct Message on Twitter to the airline explaining the situation, inserting my flight details and requesting a cancellation/refund. I put all my faith in this airline resolving my issue–after all, my work at Conversocial enables thousands of brands to engage in these sort of interactions seamlessly.

Silent Brands Lose On Social

The next day, I arrived to my new destination, with 48 hours of no sleep and a whole list of to-dos to deal with. Eagerly, I glanced at my Twitter app hoping to see a red-bubble notification next to my inbox. Nothing… no response. I publicly Tweeted at the airline one more time, asking at the very least, for a response to my inquiry.

After three days, anger fumes were coming out of my ears, so I began to vent publicly (in all-caps nonetheless). The airline care team finally took notice, because after a few seconds, I  received a response. To my dissatisfaction, however, the customer service rep answered curtly, requesting that I send an email to the complaints department. Ok, now my Latin sass was about to take over, and I swore to myself in Spanish that I would never purchase a ticket from this airline again–Nunca más! Yes, I told myself, I am the 78% of customers who are going to bail on this airline for good.

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The Vulnerable Traveller

As a side note, social customers are never as vulnerable as they are when they are travelling. Travellers are separated from their point of origin, their belongings, and their safe place–especially during international flights. Because of this, they need to feel connected to brands and trust that they will deliver consistent, helpful, seamless experiences. A response handled three days after the fact is unhelpful and slightly offensive. Customers need to know they can rely on the companies they give their service to. At the very least, under these sort of stressful conditions, that customer deserves a response.

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Price Sensitivity VS Brand Loyalty

So there I was, feeling confidence and peace of mind that karma would bite this company in the behind from the loss of my business. But when I began looking for flights back to NYC, my stomach started to crumble as I realized that the same airline I swore never to purchase from offered the most convenient trajectory, with the least travel time, at the lowest price. Price was very important factor in this equation because I had surpassed my vacation budget.

So I purchased the ticket, but it felt wrong in all sorts of ways. What alternative did I have, though? When customers are price sensitive, and there are few options in the market, can a poor customer experience really influence purchasing decisions?

Sometimes yes, sometimes no. But good customer service still matters, and here’s why:

1) Price Sensitivity Isn’t Rigid

Brands never know when and how circumstances can change consumer preferences. Just a year ago, I worked for a multi-billion-dollar consulting firm and was travelling on average 2,000 miles a week at the company’s expense. Back then, I wasn’t price sensitive, and a bad customer service experience like this one would have surely caused me to abandon my loyalty to that brand. The vulnerable traveller–regardless of price sensitivity–might forgive but they’ll never forget a bad experience.  

2) Customers’ Price Points Evolve

Secondly, because customers’ willingness to pay evolves with time. In a few years, I could get a promotion that could make me feel indifferent toward paying an extra $300 dollars on a flight. Today, I’m the “promiscuous Millenial shopper”, testing different brands and compiling the negative and positive memories and experiences. Tomorrow, I will have the luxury to choose what airline I decide to remain loyal to, and what brands I dismiss for good.  

3) Social Critiques Are Brand Hazards

Social media has created a public, free and convenient venue through which customers can vent their frustrations and reach millions. I may be a price sensitive traveller, but I can write about my negative experience on my social feed and influence friends, family, and followers. Brands–this airline in particular–may not be seeing the full picture: “news of bad customer service reaches more than twice as many ears as praise for a good service experience”.

Consumer behavior is shaped by so many dynamic factors. Price sensitivity is just one of them, but there are also cultural variables, market trends, personality traits, motivations, beliefs...you name it. The cost of bad customer service may not be as straight-forward as the cost of bad marketing. But it’s there, and it’s high. If brands doubt that for one second, they are opening the door for other innovative, social-savvy players to steal market share. In Kate Zabriskie’s words: “although your customers won’t love you if you give bad service, your competitors will.”

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