09 August 2009

Hypothesis on consumer behavior

How many opportunities do you have to make a mistake before the mistake adversely affects customer loyalty/retention? My hypothesis is that this number is getting smaller and smaller. Consumers, me included, have a reduced level of tolerance for mistakes, even perceived mistakes. This intolerance is attributable to both an abundant supply (purchase options) and attention to spending (perceived value of goods received).

Example 1: This morning I awoke early to take care of an errand. My morning ritual includes coffee and my coffee of choice is a flavor infused selection. Today, I opened a new package of Seattle’s Best hazelnut cream blend. However, I was disappointed to discover that the coffee was indeed not hazelnut infused at all. It was plain ground coffee. Did I brew it? Yes. Was this coffee substandard in any way? No. Did it taste bad? No. Did it meet my expectations? No, only because I wanted hazelnut instead of regular. Will I purchase Seattle’s Best products again? Maybe not.

What is the logic behind this decision? I am trying to be very objective about this. Coffee is not a luxury item; it is not exceedingly costly. I could go to the grocery store and make another coffee purchase right now if I felt that strongly about having hazelnut coffee on hand. However, my level of confidence in Seattle’s Best has diminished because I know that, at least once, there was a quality control error in their product packaging supply chain. I suspect that by now the quality control error has been remedied, but my overall personal experience with this brand has been affected. There is greater likelihood that the next time I select ground coffee it will be a brand other than Seattle’s Best.

Example 2: About three weeks ago Cristy and I dropped into PF Chang’s for an impromptu dinner on a weekday evening. The restaurant was not full and we were seated promptly. Our overall experience that evening was beyond disappointing. Our young server was impudent, aloof and possibly incompetent. We did not receive all of the food items we requested, even after a repeated request. Even though the food we did receive was excellent, there is almost no chance that we will return to this restaurant. Dining options are simply too plentiful and we would prefer to spend our consumer dollars in an establishment where we have previously received a favorable experience, both in terms of product and service rather than choose to extend another chance to an establishment where our experience was truly abysmal.

Example 3: Over the course of three years, I have established a consumer relationship with Montrose Car Care Center based on two factors – their location and the friendliness and sense of confidence I felt in the former manager’s general automotive knowledge. About 9 months ago, that manager departed. I was told his departure was related to the illness of a family member in another city. This seemed reasonable, so I continued to steer my automotive maintenance service needs to this business. However, after two subsequent misdiagnoses, later remedied at another establishment, my opinion regarding the range of services realistically available from this repair shop has narrowed significantly. I still take my automobile here for an occasional oil change, based solely on its convenient proximity to my office, but it is extremely unlikely that I would consider asking them to diagnose a (future) mechanical problem with my Volvo.

I may or may not be a good model for an average consumer. I do not have enough information to compare my own consumer behavior with the range of customers that purchase Seattle’s Best coffee, dine at PF Chang’s or select Montrose Car Care for automotive repair services. However, if my consumer behavior is representative of the broader population, the conclusion is that there is a direct and correlation between a single negative experience and loss of customer confidence, or worse, complete customer defection.

1 comment:

  1. The products and service providers referenced in this blog post are based solely on my personal experiences. They are real accounts; not fictional or hypothetical. I am quite certain that for any single negative customer experience, there are many many happy ones. The question remains, how many chances do you get to make a mistake before the consequences of that mistake lead to customer defection?