A new CCMC study of 8,500 respondents has found difficult-to-handle Covid/Supply Chain/Inflation issues have come to the fore along with more intense emotions and social media use. And, surprisingly, much higher levels of delight with some responses, especially digital.
The study, fielded in January 2024 and co-sponsored by Colgate, Pepsico, Purina, KraftHeinz, and Kellanova, looked at problem rates for a range of CPG categories ranging from cleaning products to chips and pet food along with consumer actions — did they complain, where, what channel, and outcomes. The data, based on the largest study of its kind ever done, has strong implications for three areas: marketing/PR messaging, contact solicitation and handling, and interpretation of Voice of the Customer data. The data also suggests a golden opportunity for applying AI to create delight using many of the twelve approaches to delight described in CCMC’s 2021 National Delight Study.
Problems Have Changed
Consumers have definitely noticed price increases and partially empty packages. For a number of the product categories examined, increased price, reduced amount in a package, and reduced perceived value were new. Problems with taste, packaging, freshness, and effectiveness (e.g., cleaning the dishes or the dog liking the dog food), still existed at about the same level, but these new problems are additional to the existing problem occurrences.
Complaint rates and channels are evolving, though more slowly: 70-80% digital
In general, 25% of consumers complain and 75% of those go back to the retailer. This means that your multiplier is 16 problems for each complaint received. It also means that your channels/retailers are getting up to five times as many complaints about your product as you do. Many retailers are unhappy about complaints and make slot allocations based on them. Some, like UK retailer Tesco, often charge back a stiff penalty to the manufacturer for each complaint received.
Among consumers complaining to manufacturers, 75% used a digital channel: chat, email, website, or social media. As this high percentage of input is digital, the response can most logically be digital, allowing for the use of templates at a minimum and AI as a key ingredient. Also, for those complaints presented to retailers via a face-to-face mode, satisfaction is one of the lowest outcomes, with only about one-third of consumers happy. This suggests that (a) retailers have lots of work to do and (b) it is to the manufacturer’s benefit to get complaints directed to them so they can assure consumer loyalty.
Complaint rates vary significantly by problem type
While anger about price and smaller packages is high, complaint rates are less than half as high as for more operational issues like defective soap dispensers and dislike of taste or seasoning. Also, complaint rates for dissatisfaction with social and environmental stands are especially low (15%), even though almost half of consumers have stopped buying a company’s products due to environmental or social issue concerns. Consumers take action but seldom communicate their views to the company. At the same time, this study confirmed the 2023 National Rage study that many of those same consumers now feel it is ok to make threats and yell at service reps.
Emotional Reactions Vary in a Counter-Intuitive Manner
Consumers who are verbose online, posting often about their consumer experiences are the least likely to yell at a service person or debate a corporate social position. Surprisingly, the online activist is the most likely to make threats of legal or physical violence.
Companies Are Less Effective in Handling the New Value/Price Issues
The data from all five companies shows they are adept at handling traditional issues and are achieving record-high levels of delight (see below). But, they are ineffective in handling price, quantity, supply chain, and social issues. Satisfaction and repurchase outcomes for these issues are 10-30% lower than traditional ones. This means companies have to test and work harder to develop clear and believable explanations, or, to have marketing reset expectations upfront. As 75% of contacts are now via digital channels, a huge opportunity exists for using AI to fine-tune and optimize these responses. Several of the sponsors are focusing on this opportunity.
An additional finding is that retailers are still receiving a much higher percentage of complaints than the manufacturers; so companies are at the mercy of the retailers and may lose slot space due to the complaints. This finding suggests manufacturers must raise the visibility of their contact centers to divert these complaints from the stores.
Loyalty and Sales Outcomes Are Surprising: 40%+ Delight is Attainable
Three times as many consumers who complain end up increasing their purchases of the brand due to the stellar responses to traditional issues as compared to purchase behaviors of non-complainants — one-third of which significantly decrease or completely stop purchases. The obvious conclusion is that aggressively soliciting complaints is a very profitable strategy — getting fewer complaint calls is not necessarily better than not hearing from the customer. Not so much for handling price, value, and social issues until better responses can be crafted.
Delight levels of 40% are traditionally unheard of, yet are now being achieved by several companies. Delight can be systematically delivered via the use of the 12 delight approaches (e.g., enthusiasm, empathy, education, identification, informed cross-selling) identified in the CCMC 2021 National Delight Study and incorporating them into the AI-driven digital responses. One-third of consumers post on social and tell an average of eight friends about delightful interactions. Word of Mouth (WOM) from delighted consumers has double the impact of WOM from merely satisfied consumers. However, the service function must make delight intentional for both digital and telephone service channels. See article, Making Delight Intentional.
Implications and Learnings
- Problems levels are rising, mostly due to consumer perceptions of value. But the majority of complaints are not going to the company, they are going to the retailer that is not very adept in handling them. Consumer services must raise their visibility to attract a higher percentage of issues.
- Delight can be delivered systematically, especially digitally, and can have quantifiable impacts on sales and repurchase. Delighted consumers who spread WOM tell an average of eight people; companies should use customer service as a WOM management tool. The most successful companies win over 70% of new customers via WOM.
- Marketing must address price increases directly — consumers are noticing and are not happy. Also, marketing and PR must communicate more effectively about social issues and not think that everything is ok because only a few complaints are being received.
- Companies must examine problem resolution by type of issue to identify those pulling down scores, value, and social. They must enhance response effectiveness on price/value — no one is doing well.
