Consumers Willing to Pay Premium for Good Online Customer Service

by | 3 minute read

According to a new survey, consumers are willing to pay for good customer service.  A new survey, The Value of Great Customer Service, commissioned by StellaService suggests that customers are willing to pay a premium of approximately 10.7% for excellent online customer service, or as much as $17.3 billion in 2010.

Furthermore, consumers in the online retail category are willing to pay an even higher premium for great service (10.7%) than they would in most other categories. Due to the seemingly distant and remote nature of online shopping, it makes sense that consumers would pay a higher premium to have the comfort and peace of mind that they will be taken care of in the case of a serious question, concern or problem.

The survey was conducted across multiple categories — financial services, healthcare, utilities and retail — including both online and brick-and-mortar stores. The total value of great customer service across all categories, both online and off, was found to be $268 billion per year, or a 9.7% premium.

Defining 'Great' Customer Service

For purposes of the survey, exceptional service consists of of three components, Jordy Leiser, cofounder and CEO of StellaService explained. "One is that it has all of the necessary online tools and interfaces — which includes comprehensive content. The second is the shipping delivery and return polices. Are consumers able to easily execute the returns process?"

There is a world of difference among e‑tailers in this category, he added, with pluses like the prepaid envelope Zappos sends to consumers, as well as negatives such as the many hoops that some e‑commerce sites still make consumers jump through to return a product.

The third element is human support, Leiser said. To test this, the survey called each retailer more than 12 times to ask questions about products, its business operations, personal concerns, etc.

Online Retail

For the online retail category, the leading factor or consideration for great customer service is speed of delivery. Helpfulness of customer service representatives and ease of access to information on a company’s Web site also topped the list for important elements of customer service for Internet retailers.

We’ve always known that consumers value great service, but this study is the first to quantify it in terms that people and businesses understand – in dollars and cents,” said Leiser. “Consumers gravitate toward companies that provide exceptional service, especially in the world of e‑commerce.”

Leiser went on to say that, “The opportunity for Internet retailers to build their businesses around providing great service is too big to ignore. By improving the basic practices and policies that matter most to online consumers, a business can quickly and dramatically bolster its competitive position, improve its financial profile and increase customer loyalty. It’s a win for businesses, a win for investors, and most importantly a win for consumers.”

Top Retailers

In conjunction with the survey, StellaService compiled a lists of customer rankings for the largest 150 e‑commerce sites. Zappos​.com, Diapers​.com and BlueNile​.com were in the top three slots, in that order, followed by Amazon​.com, Staples​.com, Crutchfield​.com, LLBean​.com, BestBuy​.com, Apple​.com, Sears​.com and REI​.com.  Rounding out the top 15 are Ebags​.com, Onlineshoes​.com, Orvis​.com and Netflix​.com.

The Value of Great Customer Service survey.  StellaService. 19 Mar. 2010.  Web.  23 Mar. 2010.