Data Snapshot: Who Prefers Service Over Price?

We just published a new piece of research, Who Prefers Service Over Price?

This report uses a new format for Temkin Group that we call a “Data Snapshot.” While many of our reports have a lot of data, these reports will be even more data intense and can serve as reference materials for looking up data points. Since this is the first report in the new format, we decided to make it available for free.

Here’s the executive summary:

We asked 5,000 U.S. consumers whether they would prefer low prices or good service when doing business with 14 types of companies. It turns out that consumers prefer low prices in every industry except for banks and computers. Our analysis looked at differences across age, income, ethnic, and educational levels of consumers. Some of our findings: life insurance is the most age-dependent, low income leads to price preference, blacks have the most preference for good service, and higher education leads to a preference for service.

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This Data Snapshot has five graphics that look at the following data (which is the first figure in the snapshot) across age, income, ethnic, and educational demographics.

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The bottom line: Low prices are important, but many people prefer good service

About Bruce Temkin
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, marketing, interaction design, customer service, and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

5 Responses to Data Snapshot: Who Prefers Service Over Price?

  1. Ginger Conlon says:

    This is especially interesting considering how many people complain about the service in the very industries they say price is far more important (e.g., airlines). Perhaps they need to remember the adage, “You get what you pay for.”

  2. Thanks for making this report widely available. We would all benefit from understanding your data collection process and your margin-of-error in these statistics especially since many of the results are “too close to call” – is this something you could share? I would also like to caution your readers about “over-generalizing” this research. For example, B2B markets are significantly different than B2C (“consumers”) in how customers purchase products and services. We’ve published on this topic in a few areas, including at http://waypointgroup.wordpress.com/2011/10/12/net-promoter-statistics-when-accuracy-goes-haywire-and-5-ways-to-proceed/

  3. The price / service tradeoff is less impactful in commodity businesses. What do the results show in highly differentiated markets?

  4. Bruce – very interesting findings, especially in the Financial Services sector. Because ‘service’ and ‘price’ have a direct relationship in service businesses, it stands to reason that those who want superior service have the option of paying for it; yet the findings appear to suggest that consumers prefer better service (presumably at higher prices) regardless of age, income levels, demographics, and educational levels.

    The findings are surprising and it would be very interesting to see the phrasing of the questions that were used during the survey.

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