Consumers Have Had Enough, 'Rage Survey' Finds

Close-up of a man screaming
Getty Images
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 experiencing "customer rage" -- they were very or extremely upset about the company response when they complained -- jumped to 68 percent from 60 percent in 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 rose to 36 percent from 25 percent of the time, while cursing jumped to 13 percent from 7 percent.

Other key findings from the 2013 Customer Rage Survey:
  • The percentage of people with customer service problems rose to 50 percent from 45 percent.
  • 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 Professor Mary Jo Bitner, executive director of Arizona State University's Center for Services Leadership. "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."
One 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 fixed, only replaced.
  • A 22-year-old woman from North Carolina said that, in the first year of ownership, she had spent $150 to $200 for four repairs to an item that cost $150.
Everyone in business realizes 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 customers happy and you've made enemies who will each tell an average of 28 people about their terrible experience.
It turns out that bad customer service is worse than no customer service. People who receive poor response 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?

How could so much money and effort have 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," it said. The 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, president and CEO of Customer Care Measurement and Consulting, which designed the survey and analyzed the results. %VIRTUAL-article-sponsoredlinks%"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."

To reduce costs, many companies try to drive customers who need solutions 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 as likely (66 versus 6 percent) to make a call as they are to 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 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, to 35 percent from 19 percent in 2011 .

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."

More from CNBC:

6 Popular Tax Breaks That Could Disappear in 2014
See Gallery
Consumers Have Had Enough, 'Rage Survey' Finds
Usually, if borrowers have part of their debt written off or forgiven, they have to treat that amount as taxable income. But in the aftermath of the housing market's implosion, homeowners who defaulted on their mortgages and had their bank write off or forgive part or all of their loans weren't required to claim the forgiven amount as income. The Mortgage Forgiveness Debt Relief Act of 2007, which created this provision, has been extended before, but now, with home prices recovering somewhat, the incentive to preserve this provision is starting to fade. That makes it more likely that the mortgage-debt forgiveness provisions might not get renewed for 2014.
Federal tax law has allowed taxpayers to deduct state and local income taxes for years, but for the 57 million people who live in states that don't charge income tax, those provisions didn't provide any relief. That changed in 2004, when lawmakers allowed taxpayers to choose instead to take a similar deduction for sales taxes. The provision, which was originally slated to expire at the end of 2007,  has been repeatedly extended by Congress. Over the years, it has provided $16.4 billion in deductions to affected taxpayers.
Teachers from kindergarten to high school are allowed to deduct up to $250 for money they spend buying supplies for their classrooms. This deduction's available even to those who don't itemize, making it more valuable than most deductions. According to figures from The Tax Institute at H&R Block, more than 3.6 million teachers took advantage of this provision in 2010 to deduct $915 million in expenses. This deduction has been extended regularly ever since its initially scheduled expiration in 2005, so, even though it's on the chopping block again, it's a pretty good bet that lawmakers will let the tax break survive into 2014.
These provisions allow certain taxpayers to deduct between $2,000 and $4,000 of qualified educational costs. This provision was also retroactively reinstated for 2012 at the beginning of this year. The difference, though, is that other tax breaks also exist for educational expenses, including the Lifetime Learning Credit and the American Opportunity Credit. (You have to pick either the tuition and fees deduction, or one of the two education credits. You're not allowed to double-dip.) Those tax credits makes it less crucial to extend the tuition deduction, although it's still a better deal for many people: The Tax Institute at H&R Block says that 2 million taxpayers used it to write off $4.36 billion in expenses in 2010.
Since 2006, taxpayers could claim a credit on certain expenses for remodeling their homes to make them more energy efficient. Currently, the maximum lifetime credit amount is $500, but amounts were higher in the past, and more than 43.5 million taxpayers have claimed an average of more than $765 using the credit.
Congress commonly waits until late in the year to extend expiring tax provisions like these, as well as others not mentioned above, such as the exemption for charitable IRA distributions, deductions for mortgage insurance premiums, and the higher immediate write-off amounts for small-business equipment purchases.

Lawmakers often use what's known as a tax-extenders bill to pass all the extensions in a single package. Earlier this month, WOTC Coalition President Paul Suplizio said that a seemingly unrelated Medicare-payments bill was probably the first step toward a year-end tax extenders bill that would cover expiring tax breaks like these.

And, just as millions of Americans procrastinate until April 15 to file their taxes, we can expect lawmakers to wait until Dec. 31 -- or beyond -- to decide the fate of these tax breaks.

Correction: A previous version of this article incorrectly attributed the Customer Rage Survey and report to the University of Arizona, rather than Arizona State University. This was a reporting error.
Read Full Story