(This article was originally featured in Property Casualty 360)
Market Conditions Drive Change in Consumer Expectations
Economic growth in the U.S. continues to expand, but at a rate that is lower than pre-recession. Consumers and businesses continue to focus on reducing expenses and stretching their dollars further. Consumers now spend more time than ever before researching their options before they make any type of purchase. What’s interesting however is that while consumers have become much more discerning around price – price is not the only factor in their purchase decision. More and more customers are willing to pay more for a better customer experience.
A study conducted by Oracle in 2012 found that customer experience is key component of revenue growth in an increasingly globalized economy where products and services are increasingly commoditized. Their study, “Why Customer Satisfaction is No Longer Good Enough,” reveals that 81percent of consumers surveyed are willing to pay more for superior customer experience. And nearly half (44 percent) indicated they would be willing to pay a premium of more than 5 percent.
Another recent study released by Accenture, called “Customer Driven Innovation Insurance Customer Study” found that 54 percent of consumers aged 18-24 and 52 percent of those aged 25 to 34 responded they would probably or certainly be willing to pay more for auto insurance with personalized service. In fact, the survey respondents under the age of 35 indicated price mattered less to them as long as they received more value.
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