Research

Study: Twitter customer care increases willingness to pay

By Wayne Huang
Wednesday, 5 October 2016

People love getting customer service from businesses on Twitter, but what is the value to businesses for providing that service? While it might seem intuitive that customers who get great help will spend more with that business in the future, new research actually quantifies that lift and helps businesses understand how to capture that value. This post shares highlights from our research, as well as tips to help customer service teams take advantage of the findings.

Requests for customer service emerged as an early behavior on Twitter, and Tweets have become a mainstream method for reaching out to businesses. Millions of people talk to businesses publicly each month via Tweets. To understand the impact of these customer service interactions on customer relationships, we designed a research study in partnership with Applied Marketing Science to figure out the potential revenue benefit to businesses who help their customers via Twitter.

Late last year, we began this work focused on the US airline industry, which found that customers who received replies from an airline demonstrated stronger satisfaction and recommendation ratings—and were also willing to pay a significantly higher price for a future ticket.

More recently, we expanded the project to replicate this research with the US quick service restaurant (QSR) and telecom industries. We found that, similar to the airline industry, customers who received replies were more satisfied with their experience, more willing to recommend the business, and willing to pay more money for that business’s products in the future—especially if the consumer received a response quickly.

We used the same rigorous conjoint analysis methodology for all verticals we analyzed.

Responding to Tweets boosts willingness to spend

Businesses create a massive opportunity for themselves when they acknowledge customer service-related Tweets from consumers. When a customer Tweets at a business and receives a response, they are willing to spend 3–20% more on an average priced item from that business in the future.

This Tweet is unavailable
This Tweet is unavailable.

Tip:If you need to discuss a private topic with a person who mentions your business in a Tweet, reply with a Direct Message deep link so you can invite customers into private, 1:1 conversations.Make sure to acknowledge the person appropriately by being personal, friendly and human.

Responding also increases word of mouth activity, likeliness to recommend, and customer satisfaction

In addition to revenue potential, customers who receive service via Twitter will create measurable upper-funnel impact. Customers are 44% more likely to share their experiences—both online as well as offline—after receiving a response from a business on Twitter. Further, they are 30% more likely to recommend the business, and respond an entire point higher (2.66 vs 3.66) on customer satisfaction surveys.

This Tweet is unavailable
This Tweet is unavailable.

Tip:Learn and grow — Twitter’s customer feedback tools let people privately share their opinions after a service interaction. Businesses can collect customer satisfaction and Net Promoter Score® data that can be compared across traditional service channels.

The fastest responses generate the greatest revenue impact

While any response is better than none, it pays to reply rapidly. When an airline responded to a customer’s Tweet in less than six minutes, the customer was willing to pay almost $20 more for that airline in the future. Similarly, in the telco industry, customers are willing to pay $17 more per month for a phone plan if they receive a reply within four minutes, but are only willing to pay only $3.52 more if they have to wait over 20 minutes.

This Tweet is unavailable
This Tweet is unavailable.

Tip:Set expectations about being responsive. Twitter has a new support indicator and message button which allow businesses to help people understand when they can expect a response and to make sure they know they have the option to start a private conversation.

Don’t be afraid of negative Tweets!

It turns out that responding to negative Tweets can create major positive impacts. 69% of people who Tweeted negatively say they feel more favorable when a business replies to their concern. And among telco customers, conversations that started with a negative Tweet resulted in higher brand favorability as well as 3X higher willingness to pay for their monthly wireless plan, compared to those whose original Tweet was positive.

This Tweet is unavailable
This Tweet is unavailable.

Tip:Consider prioritizing responses to negative Tweets over positive Tweets, but don’t ignore customer praise! Any response helps increase willingness to pay, so respond to every Tweet that you can. By responding quickly to negative Tweets, you can maximize your potential for impact.

Customer service on Twitter benefits both businesses and customers

Businesses might love these benefits, but research shows customer service on Twitter is better for customers, too.Aspect Research found that consumers like coming to Twitter because they perceive it as significantly less frustrating than other customer service channels – even preferring it slightly more than in-person interactions.

This Tweet is unavailable
This Tweet is unavailable.

Businesses have known for years that great customer service engenders brand loyalty; this research shows a wide range of additional benefits to businesses. And these benefits come at a lower cost compared to other channels: according to McKinsey & Company,support interactions on social cost 1/6th of those in a call center. Combined with the revenue potential, favorability, satisfaction, and recommendation impact of these interactions, businesses can benefit significantly from investing in helping their customers on Twitter.

Methodology

A total of 3,139 people who use Twitter completed the conjoint exercises. In addition to people who Tweeted at the top brands, we made sure to include those who had customer service interactions via traditional channels—like 1-800 numbers—as well as those who were customers in these industries during the test period but had no customer service interactions on any channel. We then used these results to develop a model that measured exactly how much shoppers valued each brand.

Net Promoter, NPS, and the NPS-related emoticons are registered trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.

This Tweet is unavailable
This Tweet is unavailable.
@WayneYHuang

Wayne Huang

@WayneYHuang

Research Manager, Twitter