According to a new national survey of consumers the cost of poor customer service in the U.K. is a significant problem: UK businesses lose a total of £15,3-billion each year when customers defect and abandon their purchases as a direct result of poor customer experiences.
A total of 514 UK-based consumers were surveyed for the report titled “The Cost of Poor Customer Service: The Economic Impact of the Customer Experience.”
Consumers were asked about the frequency of their interactions with businesses via the web, through contact centres and with their mobile devices. They were also asked to identify the impact of those interactions on their purchasing decisions. The survey group identified their service priorities and indicated the changes most needed for improving the quality of their customer service experiences.
In addition to the £15,3-billion loss to the UK economy due to poor customer service, the survey uncovered these findings:
* 73% of UK consumers ended a relationship due to a poor customer experience;
* The average value of each lost relationship is £248 per year 39% of UK consumers said it is critical for companies to provide more intelligent self- service so they are not trapped in unproductive automated systems; and
* 83% of consumers welcome more proactive engagement if it improves their experiences.
This survey represents the first large-scale attempt to place an economic value on the lost revenue from customer service across all channels when businesses do not measure up to consumer expectations. The 28-question survey of consumers in the UK was conducted by Greenfield Online. The survey was sponsored by Genesys Telecommunications Laboratories, in collaboration with industry analysts at Datamonitor/Ovum. The survey group represented virtually every age and income bracket of consumers in the UK.
Datamonitor/Ovum reviewed the consumer survey data in conjunction with its proprietary contact centre models to produce the results.
"With the rise of social media and increased consumer awareness the cost of customer frustration continues to grow,” says Daniel Hong, lead analyst of customer interaction at Ovum.
“We're advising enterprise businesses in the UK to develop cohesive strategies that straddle all channels of customer communication. The difference between delivering exceptional customer service and merely providing acceptable service is pronounced.
"Differentiating on service, especially in service-centric industries such as finance and telecommunications, is how enterprises can retain customers in today's challenging business climate."
The industries in which enterprises in the UK are suffering the biggest losses are financial services, utilities and telecommunications, which lose substantially more customers than companies in other industries. Nearly a quarter of consumers said they abandoned a financial services company or utility in the past year. Even industries that were previously safe from competition, such as utilities, must now pay closer attention to the customer experience.
Younger consumers are more likely to end relationships based on poor customer service than older consumers. Survey participants who end a business relationship said they take their business to a competitor 66% of the time. The other 34% of their business is completely abandoned.
The survey revealed the following significant root causes of poor customer service based on consumer sentiment:
* Having to repeat information;
* Feeling trapped in automated self-service;
* Being forced to wait too long for service;
* Interacting with representatives who have no knowledge of the service history (or consumer value); and
* Unable to easily switch between communication channels.
The most challenging communication channel is voice self-service, with 41% of consumers citing voice self service as the most challenging communications channel compared to only 1% who find it most satisfying. And 39% of consumers said it is critical to improve voice self-service to make it integrate more intelligently with human-assisted service.
In customer service experiences where the consumer was "trapped" in an automated system, consumers spent, on average, more than 10 minutes trying to reach a live agent. Even paper-based mail, which can be a considerably slower communications channel, is preferable to poorly implemented voice self-service systems.
Consumers say the biggest issues influencing their perception of voice self-service have to do with automated systems not recognising their unique value to the company, the lack of context during the interaction, and the need to more effectively recognise customer needs and intent.
Consumers were also asked to identify the factors that make the biggest difference in improving satisfaction levels. According to the data, consumer satisfaction increases when companies meet four key needs:
* Proactive engagement; and
Proactive outreach emerged as an area in which consumers want greater engagement. More than 83% of consumers defined proactive engagement as a “strong benefit” or would “welcome proactive assistance” when stuck on the Web or in some form of self-service.
“Most businesses understand that turning the customer experience into an emotional engagement adds value to their brand and results in consumers who are more loyal and satisfied,” says Keith Pearce, senior director of EMEA marketing at Genesys. “It is important for businesses to continually gain perspective on the changing nature of customer service, as well as consumer perceptions of it. We hope these survey results will provide enterprises with a better understanding of the opportunities and the challenges in delivering a great customer experience.”