Consumer attitudes during credit crunch

A RightNow-sponsored survey has revealed that 82 per cent of adults believe organisations need to listen and act on consumer feedback if they are to weather the credit crunch.

A new study of consumer spending and expectation during the current credit crunch has found that while consumer spending is likely to decrease or stagnate, expectations of improved customer experiences and offerings are rising.

The survey, conducted by Loudhouse Research and commissioned by RightNow Technologies, polled 1,000 British adults and found that while 48 per cent said they expected to reduce their spending, 88 per cent are likely or very likely to take their business elsewhere on the basis of a poor customer experience.

The correlation between consumer spending and customer experience is further meted out with respondents indicating the two biggest factors likely to influence their spending during a credit crunch are competitive prices (79 per cent) and a combination of good prices and good customer service (72 per cent).

Retailers relying on brand pedigree, product uniqueness or reputation to see them through the downturn in spending may come unstuck as these were listed as the three least influential factors.

Overwhelmingly, 82 per cent of consumers believe that during the current economic climate, organisations must listen and act on customer feedback in order to retain business while 74 per cent are less likely to do business with an organisation if their feedback is ignored.

Multi-channel feedback surveys are an essential tool for measuring and improving customer experiences, and the good news is that consumers are willing to provide feedback with 94 per cent of them having done so in the past 12 months.

The onus is on companies to utilise the tools and technology available to acknowledge and act on that feedback or risk losing customers.

Retailers appear to receive the most feedback (64 per cent), followed jointly by banks/insurers and telecommunication companies (26 per cent).

Two of the sectors least likely to respond to feedback are banks/insurers (34 per cent) and telecoms (31 per cent).

Interestingly, it seems that consumers aren't just focused on providing negative feedback.

The report found 27 per cent of respondents always/frequently give positive feedback following a one-off or regular purchase versus 14 per cent who provide negative feedback for the same scenario.

However, these statistics may be misleading as consumers simply vote with their feet, rather than expend energy providing feedback about a poor experience.

The report also found that while consumers are intolerant of poor customer experiences, organisations will have to make concessions in other areas to attract and keep customers.

For instance, consumers want more offers and discounts (79 per cent), free deliveries (72 per cent) and improved relevancy of marketing communication (29 per cent) as incentives to encourage them to increase their spending over the next 12 months.

"Brands selling directly to the consumer be warned; as the credit crunch deepens and spending decreases, offering 'sweeteners' to consumers is only half the survival story," said Joe Brown, RightNow's EMEA General Manager.

"They won't tolerate corners being cut when it comes to customer service and are willing to offer you feedback about how to improve the customer experience you deliver.

"Don't let that valuable insight disappear into a feedback black hole: work on capturing and using the feedback to build a loyal customer base that will still be loyal once the crunch is over".

All figures, unless otherwise stated, are from Loudhouse Research.

Total sample size was 1,000 adults.

Fieldwork was undertaken in 11 June 2008.

The survey was carried out online.

The figures are nationally representative of all GB adults (aged 18+).

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