The statistics of satisfaction

by Nancy Branka
June 2005

Some of the most widely quoted research on customer service was conducted by a company called TARP in the 1970s. Since then, much of the research has been updated, with the original numbers often confirmed—but sometimes modified. These key findings and updates shed light on the fickle consumer:

TARP’s original study found it was five times as expensive to win a new customer as to keep a current customer. Since then, TARP has found the real ratio of cost to win a new customer vs. retain a current customer varies from 2 to 1 to 20 to 1.

One set of data often attributed to TARP is the reasons why customers leave. This so-called study reports that 2% of customers die, 5% have personal reasons, and the rest are lost due to poor employee attitude. However, the research shows only 20% of dissatisfaction is caused by employee actions, 40% by corporate products and processes which have an inherent unpleasant surprise for the customer, and up to 40% are caused by customer mistakes or
incorrect expectations.

On average, across all industries, 50% of consumers will complain about a problem to a front line person. Only 1-5% of customers will escalate their complaint to a local manager or corporate headquarters.

An 800 number at corporate headquarters will, on average, double the number of complaints getting to corporate. However, only one out of 100 to 500 will actually be addressed to a senior executive.

On average, twice as many people are told about a bad experience with a company than they are about a good experience.

Residents of the New York City region complain 3.4 times as often, on a per-problem basis, as the national average, while those in Washington State complain half as much as the national average.

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