I recently published a research report called “Who Wants Low Prices Or Good Customer Service?” that looked at how low prices and good customer service drive consumer decisions. Using survey responses from about 4,600 US consumers, I created four segments of consumers.
The analysis looked at this segmentation across 12 industries: airlines, banks, cell phone service providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, medical insurance companies, PC manufacturers, retailers, and TV service providers. Here are some of the findings from the research:
- Price & Service Seekers dominate. By far, the largest number of consumers say that both low prices and good customer service are important. The percentage of these Price & Service Seekers ranges from 53% for investment firms to 70% for retailers.
- Service Seekers come in second. The second-largest segment of consumers is those who look for good customer service but not low prices. These Service Seekers range from 15% for retailers to 34% for banks.
- Price Seekers is the smallest segment. Across all 12 industries, the percentage of consumers who said that low price is important, but good customer service doesn’t represent the smallest group. The percentage of Price Seekers ranges from 3% for banks to 10% for TV service providers.
We also looked at the demographics of each group in each industry. Here are some of the overall findings:
- Price Seekers tend to be college-educated males with children.
- Service Seekers tend to have high incomes and don’t rely on recommendations.
The bottom line: To best serve customers, you need to understand what they want (and most want good customer service).
This blog post was originally published by Temkin Group prior to its acquisition by Qualtrics in October 2018.