The Impact of Tipping and "Tipflation" on Customer Satisfaction Featuring Forrest Morgeson

How Increased Tipping Influences Value Perception and Customer Experience 

Shep Hyken interviews Forrest Morgeson, Director of Research at the American Customer Satisfaction Index and Associate Professor of Marketing at Michigan State University. He talks about how tipping and "tipflation" impacts customer satisfaction scores and the need for businesses to improve customer service and experience. 

Top Takeaways:   

• The frequency of tipping, or "tipflation," has increased across industries. Businesses should consider tipping practices' impact on customer satisfaction and carefully evaluate when and how tipping should be implemented. 

 

• Rising prices and increased pressure to tip can create a sense of guilt for consumers. This may lead some individuals to avoid experiences where they feel obligated to over-tip. Businesses should be mindful of these factors and strive to find a balance that doesn't cause customer discomfort. 

 

• High customer satisfaction ratings contribute to the success of brands and can be indicators of financial performance. Companies that excel in simplicity, convenience, and NPS scores tend to outperform the market collectively. 

 

• Positive experiences in one industry can shape customer expectations in others. For example, exceptional customer service at an Apple store can set the bar for expectations in restaurants and other industries. Brands should aim to provide consistent and engaging experiences across all touchpoints to meet customer expectations. 

 

• While technology can enhance service delivery, it should be working well and dependable before implementation. Reliability is crucial to maintaining positive customer experiences and satisfaction. 

 

• Plus, Shep and Forrest discuss ways to increase your customer satisfaction scores. Tune in! 

Quote:  

"When tipping becomes a common expectation in service interactions, consumers will mentally factor it into the price and value perceptions." 

 

About:   

Forrest Morgeson is the Director of Research at the American Customer Satisfaction Index. He is an Associate Professor of Marketing at Michigan State University, where he teaches marketing management, marketing strategy, and marketing research courses to EMBA and MSMR students. 

 

Shep Hyken is a customer service and experience expert, New York Times bestselling author, award-winning keynote speaker, and host of Amazing Business Radio.

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