• by Sarah Mahoney  @mahoney_sarah, March 30, 2012

Even marketers that consider themselves head-of-the-class in customer service need to start earning extra credit, according to a new report from Forrester.

“People get used to a level of service very quickly, so you’re constantly shooting at a moving target,” says Megan Burns, Forrester’s principal customer service analyst and author of this year’s “The Business Impact of Customer Experience.”  “And the financial benefit can be immense. Because customer experience correlates with loyalty, improvements can drive $1.36 billion in incremental annual revenues for the hotel industry, and $1.3 billion for wireless service providers.” (Gains come from incremental purchases from happy customers, as well as the referrals they make.)

This year, she says, “in all the different industries we looked at, we saw a slide in the high score. It’s a very real phenomenon that what was good enough to earn you a top score a few years ago isn’t now -- that level of satisfaction is just expected.”

Marketing messages drive these expectations. In property and casualty insurance, for example, the tendency to switch carriers is not so much driven by price as it has been in the past, thanks to such  advertising campaigns as Amica’s “it's not just about how you're covered, it's how you're treated” and Allstate’s “Mayhem.” “Messaging may be changing the way people think about insurance, making them more attuned to customer experience.”

The research is based on responses from more than 7,600 adults.

Some sectors, including hotels, are very easy for customers to switch from. Others are more difficult, so Forrester probed more deeply beyond the “likely to switch” question in different categories. “Most people are tied to their health insurer by who they work for. So when we asked them would you switch if you could, 22% say they would. These insurance companies have a lot of work to do.”

The survey also dug into word-of-mouth specifics, confirming that people would rather kvetch about a lousy experience than kvell about a good one. For example, she says, 17% of those surveyed had recently had a good experience with an Internet service provider, and told 3.2 people about it. But 9% had a rotten experience, and they blabbed about it with 5.6 people.