Despite how upset it might make you when someone overcharges you at the supermarket or damages your package in the mail, you are probably quick to forgive if they apologize and rectify the mistake. This is true for must consumer relationships—except for those associated with credit card companies.
Statistics show that consumers are not so quick to forgive credit card companies when they make a mistake of any kind. They are less willing to forgive credit card companies than they are to forgive supermarket cashiers or attendants, parcel delivery services, auto dealers, tradesmen, and even their investment firms. As a matter of fact, the 2012 Temkin Forgiveness Ratings ranked credit card companies below:
- The airline industry
- Health insurance plans
- Entertainment providers
- Telephone service providers
Actually, credit card companies rank at the bottom of 18 industries according to Bruce Temkin, the managing partner of the Temkin Group who conducted the survey. This, of course, does not look good for the credit card industry.
Willingness To Forgive
"Think about the people you know," Temkin said. "If you like them, then you're willing to forgive them for just about anything. With people you don't like, it's hard to forgive them for even the littlest of issues." While USAA (a financial services company that mainly deals with military members and their families) performed exceedingly well, just about every other company in the credit card industry received a "very weak" rating.
This is the only industry to score so low in the Temkin survey. In fact, the American Bankers Association (who represents banks and credit card issuers) declined to directly comment on the findings, opting to, instead, issue a very basic, general statement. American Bankers Association Senior Director of Public Relations, Jeff Sigmund, said:
"Most people see credit cards as a useful financial tool and have a positive relationship with their own . Providing good customer service and resolving any issues quickly is of paramount importance and remains our highest priority."
What is most unfortunate about this is that the life of the average credit card holder is vastly unpredictable, particular during a time like this. Sometimes people have issues that cannot be resolved to their liking (especially if their solution is something a company cannot provide) and this creates a negative image in the mind of the consumer, which leads to powerful word of mouth publicity.
Word Of Mouth
Everyone knows that word of mouth advertising is the most effective, but it is not in the way that most businesses prefer. For example, when someone has a good experience with a company or a business, they might tell two or three people about it. Ironically, they do not necessarily volunteer this information but will respond positively if asked or prompted by a friend of family member.
Unfortunately, the same person, on average, will probably tell more than ten people whenever they have a bad experience; and what is worse is that they will more than likely volunteer this information to anyone regardless of whether or not they asked. This is a statistic that is extremely important in the age of social media where people broadcast their every thought and feeling on a whim and on the go. This is, essentially, what is happening to credit card companies.
Refining The Business Model
According to Ed Mierzwinski, the Consumer Program Director of U.S. PIRG (a federation of consumer interest organizations across the United States), "Credit card companies will keep coming in last as long as they use ‘gotcha' business models designed to hurt consumers—then refuse to help even the small number of consumers who complain."
Similarly, Christopher Viale, President of Cambridge Credit Counseling (MA) and the VP of the Association of Independent Consumer Credit Counseling Agencies (a firm that represents 32 non-profit credit counseling companies) stated:
"...credit cards are a lifeline to a lot of American consumers, which helps them handle expenses that are not expected or otherwise provide needed financial support. So when this lifeline catches a consumer off guard with... anything that affects their ability to use that tool, that's going to have a long-lasting effect on... that relationship."
The state of credit, especially in the United States, is quite rocky. While it is not easy to please every consumer, it seems that credit card companies need to revamp their strategies to win back the goodwill of the consuming public.