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 an experience management transformist, helping organizations improve business results by engaging the hearts and minds of their customers, employees, and partners. My "job" is Head of the Qualtrics XM Institute. The Institute is still being established, but our goal is to help organizations around the world thrive by mastering Experience Management (XM). As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. And, as many people know, I love to speak about these topics in almost any forum. Prior to joining Qualtrics, I was managing partner of Temkin Group (leading CX research, advisory, and training firm), co-founder and chair of the Customer Experience Professionals Association (CXPA.org), and a VP at Forrester Research. I'm a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Check out my LinkedIn profile: www.linkedin.com/in/brucetemkin

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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