NZ Consumers Proactive in Penalising Companies

New Zealand Consumers Proactive in Penalising Companies for Poor Customer Experiences

AUCKLAND, NEW ZEALAND - June 28, 2010 ‹New Zealand consumers are fighting back against poor customer experiences by removing their business from companies whose service doesn¹t meet their expectations. A new study commissioned* by RightNow (NASDAQ: RNOW), found that nearly two-thirds (61 percent) of New Zealanders had taken this course of action.

More than 1,000 consumers across Australia and New Zealand were surveyed about their customer experiences with seven key industries; telecoms, internet service providers (ISPs), insurance, finance, travel/hospitality, utilities and online retailers. The survey found consumers in New Zealand to be more proactive than their Australian neighbours at responding to poor customer experiences; whether that¹s by boycotting a business following something they¹ve experienced directly, or as a result of something they have seen broadcast on the social web about the experiences of other consumers.

Customer Experience Industry Index: Among those New Zealanders boycotting businesses, just 40 percent felt that the company was aware that they had defected, while only a meagre 25 percent said that the company had tried to win back their business (see figure 1). The finance industry was identified by consumers as having the highest customer churn following a poor customer experience and that travel companies are the least likely to realise they¹ve lost business and, subsequently, the worst at trying to win back that business.

Of the seven verticals respondents were asked about, the study found the following key insights relating to customer experiences with the telecommunications and ISP industries:

Internet Service Provider Industry: The study provided the following key insights relating to customer experiences in the ISP industry (rank 1 to 7, with 1 being the worst): • 47 percent of New Zealanders said they¹d had a poor customer experience when making a purchase with an ISP, making it the second worst industry for poor customer experiences • 47 percent of New Zealanders have stopped doing business with an ISP following a poor customer experience, making it the industry least likely to experience customer churn • Of those removing their business from ISPs following a poor experience, 63 percent felt that the company was aware they¹d stopped doing business • 25 percent of New Zealanders felt that ISP companies had tried to win back their business

Telecom Industry: The study provided the following key insights relating to customer experiences in the telecom industry (rank 1 to 7, with 1 being the worst): • 58 percent of New Zealanders said they¹d had a poor customer experience when making a purchase with a telecom company, making it the worst industry for poor customer experiences • 58 percent have stopped doing business with a telecom company following a poor customer experience, making it the fourth worst industry for customer churn • Of those removing their business from telecom companies following a poor experience, 62 percent felt that the company was aware they¹d stopped doing business • 28 percent of New Zealanders felt that telecom companies had tried to win back their business

Social Customer Experiences: While the survey showed that social media broadcasts about poor customer experiences have the power to negatively influence the people who see them, it also found that positive discussions on the social web can help drive sales. 23 percent of New Zealanders said they have read a positive consumer discussion about a company¹s products or services on a social media site and made a purchase ­ 67 percent of those purchases were online.

In fact the study found New Zealanders to be more active on the social web than Australians and more open to interactions with companies through social networking sites like Twitter, YouTube and Facebook. Of the two-thirds (63 percent) of New Zealanders actively participating on the social web, 40 percent said they would be happy for a company to resolve and support their customer service issues via social networking sites. In Australia only 27 percent of consumers were open to this type of interaction.

Likewise, when consumers were asked about how companies might interact with them through social networking sites, in each case New Zealanders appear happier to socially engage with companies than their Australian counterparts. In particular, consumers in both countries were asked how they would feel if they posted a negative comment about a company on the social web and the company contacted them to try and resolve the issue. In New Zealand 64 percent of people would welcome this type of interaction, versus 49 percent of people in Australia.

Commenting on the study¹s findings, Brett Waters, RightNow¹s Vice President Asia-Pac South, said: ³It¹s second nature now for most New Zealanders to interact with friends and family through the social web, so it makes sense that engaging with companies through this medium is appealing to them. Good customer experience is all about connecting effectively with customers through their preferred touchpoints, whether it¹s the contact centre, the web or socially. My advice to companies is to embrace social media as an additional customer interaction channel, integrating it as a seamless part of the overall brand strategy in order to better serve consumers and deliver the standard of customer experiences they expect.²

Influences on Purchases: The benefits of providing good customer experiences plays out when considering what sources influence purchase decisions. The study found that while New Zealanders are tuned out to company marketing and advertising of any form, they do place great importance on word-of-mouth recommendations from friends and family (69 percent). The transparency afforded through online customer reviews and feedback also holds sway during the purchase decision with 61 percent of consumers placing confidence in what others say about a company.

*Conducted by StollzNow, 1,007 people across Australia and New Zealand participated in an online survey in June 2010

ENDS

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