Study: Angry Customers Costing Businesses $76 Billion in Revenue

Consumers aren’t any happier despite more choices, more deals, and more channels in which to shop than any other generation in the history of mankind.

More than 56 million Americans experienced at least one shopping problem during the last 12 months and cost businesses approximately $76 billion in revenue, according to a recent survey by the W. P. Carey School of Business at Arizona State University.

The independent study is based on one originally conducted by the White House in 1976. The 2013 version is the sixth study wave, offering a clear comparison of customer satisfaction over the years. Customer Care Measurement & Consulting was the principal survey designer and analyzed the results with the Center for Services Leadership at Arizona State. NOVO 1 carried out the phone interviews of about 1,000 households.

The study found that the amount of people reporting customer problems went from 32 percent in the 1976 study, to 45 percent in 2011, and then to 50 percent in 2013. The number of households experiencing customer rage went from 60 percent just two years ago to 68 percent this year; yelling at customer-service representatives went from 25 percent in previous rage studies to 36 percent today, with cursing up from 7 percent to 13 percent. Ninety-eight percent of the most serious problems stemmed from private companies.

While social media has played a role in upping consumer anger—ranting on social sites such as Facebook has nearly doubled (19 percent in 2011 to 35 percent now)—customers are still 11 times more like to complain by phone rather than on the Internet.

The Arizona State study isn’t the first this year to point out the hefty loss of revenue businesses face from angry consumers. According to consulting firm Accenture, 66 percent of customers switched companies in at least 10 industries because of poor service in the last year. Some of the reasons why customers become frustrated included: having to contact a company multiple times for the same issue, being put on hold for a long time, and having to repeat their problem to several company representatives. Consumers also become frustrated when a company doesn’t make it easy to do business with it, promises one thing but delivers another, and gives the customer inconsistent experiences from channel to channel.  

Jonathan Green, coproprietor of AAA Gold & Jewelry in Plant City, Fla., has sound advice for jewelers dealing with angry customers during the last week of the holiday rush:

  • If you sold a bad product, you just have to try your best to make good by replacing it or offering a discount on a future purchase.
  • During the holidays, things can get busy, so speedy service is something that most will become aggravated with. Managers need to be aware of sales staff that isn’t qualified or familiar with the store’s customer service procedures.
  • When someone comes in with a problem, a member of the floor staff should be direct and do what he or she can to resolve the issue. If a sales representative sees that a customer is being unreasonable right off the bat, they should get the manager before digging themselves into a hole they can’t get out of.