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By Herb Weisbaum

Americans are not very happy consumers. We’re frustrated and angry — and for good reason.

More people than ever are dissatisfied with the products and services they buy, according to a new report from Arizona State University's W.P. Carey School of Business. And when there is a problem, we’re less happy with the customer service we receive.

The number of households that experienced “customer rage” — saying they were very or extremely upset about the company response when they complained — jumped from 60 to 68 percent since the last survey in 2011.

More of us are expressing that rage by yelling and cursing at customer-service representatives than two years ago. Yelling increased from 25 percent to 36 percent of the time; cursing jumped from 7 to 13 percent, even though neither are the most effective ways to get consumer satisfaction.

Other key findings from the 2013 Customer Rage Survey:

  • The percentage of people with customer problems increased from 45 to 50 percent since 2011.
  • Most of those who complained – 56 percent — said they got absolutely nothing as a result, up 9 percentage points.
  • The product most often responsible for enraging us is cable or satellite TV.
  • Though many people associate the government with customer-service issues, 98 percent of the most serious problems stemmed from private companies.

“These numbers have just steadily increased and it’s disconcerting to see,” said Prof. Mary Joe Bitner, executive director of the Center for Services Leadership at Arizona State. “We all know that some companies are doing a good job at this — they provide great products and service — but on average, many are not doing this very well."

A thousand households were questioned for the Customer Rage Survey during the summer. They shared their customer service horror stories. A few examples:

  • A 35-year old woman from Maryland was upset because she was not allowed to return a bathing suit that she discovered had been previously worn and returned.
  • An 83-year-old man from Utah was told by the repair shop that the manufacturer does not make the products to be repaired, just to be replaced.
  • A 22-year-old woman from North Carolina said that she had her product repaired four times in the first year at a cost of $150-$200, for an item that cost $150.

Why the poor results? It’s not for the lack of trying
Everyone in the business world knows the importance of good customer service.

Solve a problem and you create a loyal customer who will tell 10 to 16 others about your company. Fail to make them happy and you’ve made an enemy who will tell an average of 28 people about their terrible experience.  

It turns out that badly-handled customer service is worse than no customer service at all. People who receive poor customer service after a problem become 12 percent less brand loyal than if they didn’t bother to complain at all.

“Given the fact that most complainants are not satisfied, corporate America is spending billions of dollars on customer care programs that are actually losing them customers,” Bitner said.

Why is this happening? Why has so much money and effort been put into customer service and yet satisfaction levels are no higher than they were in the mid-1970s?

The report blames poor execution. Many companies are “doing all the right things, the wrong way.” The upgraded investment in corporate complaint-handling departments has not kept up with customer expectations.

“It ranges from how they do their training, to the various policies they put in place, and bad use of technology,” said Scott Broetzmann with Customer Care Measurement and Consulting, the company that designed the survey and analyzed the results. “It’s hard to believe that companies could spend as much as they do and get as little back as they seem to be getting.”

In order to reduce costs, many companies try to drive customers to the Internet. A web chat or email complaint is much cheaper to handle than a phone conversation with a service agent. But it’s much harder to give the customers what they’re looking for in that online environment.

Unhappy customers want to talk to someone on the phone and get an answer quickly. The survey found they are 11 times more likely (66 vs. 6 percent) to make a call than use the Internet to complain.

What do people want when we contact customer service?
We expect the companies we do business with to be there for us when there’s a problem after the sale. But all too often, they’re not.

It’s hard to reach them – those phone trees and hold times seem endless – and it’s often impossible to get a straight answer.

“The number one thing people want is to be treated with dignity and courtesy,” said Jack Wilkie, chief marketing officer with NOVO 1, a customer-service training company that conducted the survey. “People also want that representative to be knowledgeable, helpful, friendly and patient.”

The goal, of course, is to get the problem solved. But we also want an apology, and a lot of people don’t get it. The survey found that when companies added a free remedy, such as an apology, to any monetary relief, customer satisfaction doubled.

And if a problem is not handled to our satisfaction, we are more likely to talk about it on social media. That behavior has nearly doubled since 2011, from 19 to 35 percent.

Lessons to be learned
Most businesses see customer service as an expense. This study shows they need to consider it as way to improve the bottom line.

“There’s clearly a benefit to better customer service and a real cost for poor service,” Broetzmann said. “Businesses are losing billions of dollars a year because of lousy customer service.”

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.