Comparing Price Seekers And Service Seekers

I recently published a research report called Who Wants Low Prices Or Good Customer Service? that looked at how low prices and good customer service drive consumer decisions. Using survey responses from about 4,600 US consumers, I created four segments of consumers: 

ServicePriceMatrix
Source: Forrester Research

The analysis looked at this segmentation across 12 industries: airlines, banks, cell phone service providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, medical insurance companies, PC manufacturers, retailers, and TV service providers. Here are some of the findings from the research:

  • Price & Service Seekers dominate. By far, the largest number of consumers say that both low prices and good customer service are important. The percentage of these Price & Service Seekers ranges from 53% for investment firms to 70% for retailers.
  • Service Seekers come in second. The second largest segment of consumers is those who look for good customer service but not low prices. These Service Seekers range from 15% for retailers to 34% for banks.
  • Price Seekers is the smallest segment. Across all 12 industries, the percentage of consumers who said that low price is important, but good customer service isn’t represents the smallest group. The percentage of Price Seekers ranges from 3% for banks to 10% for TV service providers.

We also looked at the demographics for each group in each industry. Here are some of the overall findings:

  • Price Seekers tend to be college-educated males with children.
  • Service Seekers tend to have high incomes and don’t rely on recommendations.

The bottom line: To best serve customers, you need to understand what they want (and most want good customer service)

Written by 

I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

4 thoughts on “Comparing Price Seekers And Service Seekers”

  1. Im not buying the results…………
    Its all about the lowest price……….if it werent the stores that have basically no customer service ….I.E. Costco,Walmart, Sams Club etc ….wouldnt be doing as well as they are.

    Just look at Consumer electronics as an example…………Costco and Walmart are cleaning up and all others have died. Best Buys time will come as they wont be able to compete either….the same as Circuit City, Good Guys…etc

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