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Bad Experience Loses Customers

customerserviceTemkin Group, a leading market research and consulting firm that helps organizations improve their customer experience, released a new research report: "What Happens After A Good or Bad Experience?" The study, based on a survey of 5,000 U.S. consumers, analyzes feedback and purchase behaviors after good and bad experiences.

The report shows that consumers encounter bad experiences most frequently with TV service providers, retailers, and Internet service providers, but report the fewest bad experiences with grocery chains.

Consumers respond differently to bad experiences across the 19 industries in the study. More than one-third of consumers who had a bad experience with a rental car agency, credit card issuer, computer company, or auto dealer completely stopped spending with the company. Fortunately for retailers and Internet service providers, their customers are the least likely to abandon them after a bad experience.

The research also examines how consumers respond to a company's service recovery efforts. When consumers feel that a company responded very poorly after a bad experience, almost three-quarters of them stopped or decreased their spending with the company. On the other hand, when companies had a very good response, less than one out of five decreased their spending and more than one-third increased their spending.