Media and Marketing for Consumer Brands

Price Is What They Pay. Service Is Why They Come Back.

by Editorial Team

One number for the next board meeting: 72% of United States consumers say they will pay more for a better experience and 68% will pay specifically for better customer service, with willingness rising to 84% in airlines and 77% in rideshare, according to Qualtrics XM Institute research fielded among 10,000 US consumers and published in May 2025. For a retail or consumer chief executive, that is a pricing finding as much as a service finding: the market has already told researchers it will fund a better experience, and the brands collecting that premium are the ones that built the service before they asked for the price.

Chewy is the clearest current example of the trade working. In its first quarter of fiscal 2026, ended May 3, 2026, the company reported net sales of $3.36 billion, up 7.7% year over year, with 21.5 million active customers, net sales per active customer of $597, up 2.4%, and gross margin expanding 50 basis points to 30.1%. Its full fiscal 2025, closed February 1, 2026, produced $12.60 billion in net sales with Autoship customers accounting for 83.3% of the total, roughly $10.5 billion of recurring revenue.

What sits underneath those numbers is a service organization known for hand-painted pet portraits, handwritten cards, and sympathy flowers sent to customers whose pets have died, a set of practices Fortune and Bloomberg have documented since at least 2016. Neither the volume of those gestures nor their budget is disclosed. The financial pattern they accompany is disclosed, and it points to a durable conclusion for a chief executive weighing where the next dollar of margin should go.

Service Shows Up in Revenue Per Customer, Not Just in Satisfaction Scores

Chewy's active customer count and its net sales per active customer moved in the same direction at the same time, which is the pattern a service investment produces when it works. Growth arrived from customers spending more inside an existing relationship rather than from a larger volume of new buyers acquired at a lower price. Average order value and customer retention are the same conversation viewed from two sides of the ledger.

The marketing lesson: Revenue per active customer is the cleanest scoreboard for a service program, because it captures whether the relationship is deepening rather than simply widening.

Recurring Revenue Is a Service Outcome

Autoship at 83.3% of net sales describes customers who have decided the relationship is reliable enough to automate. Subscription depth of that kind is earned in the resolution of small problems: a delivery corrected, a refund handled generously, an order adjusted without friction. Zendesk's CX Trends 2026 report, based on more than 11,000 respondents across 22 countries surveyed in June 2025, found that 86% of consumers say responsiveness and accurate resolution strongly influence their purchase decisions, and 85% of customer experience leaders say customers will move to another brand when an issue goes unresolved on first contact. Zendesk sells customer service software, and its sample is large and its methodology disclosed.

The marketing lesson: First-contact resolution is a customer retention program, because every clean resolution makes the next automatic reorder easier to justify.

The Customer Acquired at Full Price Is Worth More

Peer-reviewed research by Michael Lewis, published in the Journal of Marketing Research in 2006, examined a newspaper subscription business and an online grocery retailer and found that acquisition discount depth moves inversely with repeat-buying rates, with customers acquired without a promotion carrying roughly twice the long-term value of customers acquired at a 35% discount. The study is twenty years old and remains the most-cited empirical result on the question.

The marketing lesson: Full-price acquisition builds a stronger customer lifetime value base, which makes the composition of new customers as important to track as the count.

The Market Is Already Discounting Deeply, Which Raises the Value of Every Other Lever

Adobe Analytics tracked $257.8 billion in United States online spending between November 1 and December 31, 2025, up 6.8% year over year, with peak discounts reaching 30.9% off list price in electronics, 29.6% in toys, 25.1% in apparel, and 24.3% in televisions. Salesforce recorded the same season from a different angle: United States online sales rose 4% on order volume up just 1%, with average selling price up 7%. Demand moved toward higher-priced items even in the most promotional weeks of the year.

The marketing lesson: When an entire category discounts at similar depth, price stops functioning as brand differentiation, and customer experience becomes the variable a brand can still own.

Roughly 40 Percent of Perceived Value Sits Outside the Price Tag

Deloitte's 2026 retail outlook, drawn from a survey of 330 retail executives fielded between October 13 and November 19, 2025, found nearly seven in ten agree that consumer value-seeking is a structural shift rather than a temporary one, and that 40% of perceived brand value comes from factors other than price. In the same study, 46% of executives are investing in omnichannel experience and 36% are strengthening loyalty programs.

The marketing lesson: Two-fifths of perceived value is available to any brand willing to build brand identity, service quality, and convenience into the offer, and it is the portion competitors cannot copy with a coupon.

Consumers Place a Price on Human Help, and the Durable Move Is to Build It Into the Product

Tiered and premium support has become a visible product decision across several industries, with dedicated service lines reserved for top loyalty tiers and paid support included in subscription products, a trend CX Dive documented across 2025. The Qualtrics finding that 68% of consumers would pay for better customer service confirms the underlying value. Delta Air Lines demonstrates the version that compounds: the carrier closed 2025 with $58.3 billion in adjusted revenue, premium revenue up 7% and loyalty revenue up 6% year over year, $8.2 billion in American Express remuneration, and diversified high-margin revenue at 60% of total revenue, while expanding Delta One Check-In to every United States hub and equipping more than 1,100 aircraft with complimentary Wi-Fi.

The marketing lesson: Service that is included in the product creates pricing power across the whole customer base, which is a broader and more durable form of monetization than pricing help at the moment a customer needs it.

Steady Satisfaction Scores Make Improvement Visible

The American Customer Satisfaction Index registered 76.9 out of 100 in the fourth quarter of 2025, holding close to where it has sat since 2017. Forrester's 2025 Global Customer Experience Index, covering 469 brands and more than 275,000 customers across 13 countries, found 73% of brands unchanged in experience quality year over year, with 6% improving. In a field where most competitors hold position, a measurable gain stands out to customers immediately.

The marketing lesson: A flat category benchmark is an opportunity for the brand that moves, because a visible improvement in customer experience registers with customers faster when everyone around it holds steady.

The Broader Takeaway

The metrics that carry this argument into a board conversation are the familiar ones. Revenue per active customer shows whether relationships are deepening. Subscription or repeat rate shows whether service has earned automatic reordering. Full-price sell-through shows whether brand equity is doing the selling. Gross margin shows whether the premium customers say they will pay is actually being collected. Chewy's first quarter of fiscal 2026 moved all four in the same direction.

The thinking applies well beyond pet retail. A grocer, a beauty brand, an apparel label, and a business services firm each face the same choice between funding the next promotion and funding the reason a customer returns without one. Consumers have answered the question in survey after survey at 72% and 68%. The brands acting on that answer are converting service into pricing power, and pricing power into margin.

Ready to Build It

RSL News Inc. designs brand strategy and customer experience programs that turn service quality into pricing power, with a measurement framework that shows the return in revenue per customer rather than in sentiment alone. If you are deciding where the next margin dollar should go, reach out.

Related reading

References

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