Survey Shows Cost of Poor Customer Service
Survey of 16 countries shows poor service costs USD 338.5 billion per year in lost business
Financial services, cable & satellite TV, and telecommunications
firms at most economic risk from poor customer service.
According to a new international survey of consumers, the cost
of poor customer service in 16 major industrialised economies
causes businesses to lose a total of USD $338.5 billion per year
when customers defect and abandon their purchases as a direct
result of poor customer experiences.
The hardest hit industries across all countries surveyed are
financial services, cable and satellite TV providers, and a
variety of telecommunications companies.
The average value of each lost relationship across all countries
surveyed is $243 per year. Losses were defined as transaction
taken to a competitor (63 per cent of the total) and
transactions abandoned entirely (37 per cent of the total).
The survey asked consumers their priorities and the changes most
needed to improve the quality of their customer service
experiences in: Australia, Brazil, Canada, China, Czech, France,
Germany, India, Italy, Mexico, Netherlands, New Zealand, Poland,
Russia, UK, US.
While many larger economies saw greater impact, the losses were
not always proportionate to the size of the economy. For
example, Brazil and Mexico represented two of the top four
countries impacted.
In the past year financial services firms saw more than $44
billion in lost revenue. And cable and satellite TV providers
alone suffered more than $37 billion of losses. Wireless network
providers and Internet service providers each had $36 billion in
lost revenue. Landline carriers also lost $33 billion.
Best and Worst Rated Industries
Some industries that were hard hit, like financial services,
also had some good news. Financial services companies were
viewed more positively than negatively, while other industries,
such as telecommunications, were not as fortunate: negative
sentiment outweighed positive sentiment by a two-to-one ratio.
Consumers were asked to select the industries that did the best
and worst job of customer service. The consumer’s choice for
best customer satisfaction with industry is shown in blue, and
worst industry is shown in red. The most positive ratings are
for consumer products, travel/hospitality, and financial
services. The most heavily negative ratings are for
telecommunications and government.
Survey Sample
A total of 8,880 consumers, at least 500 from each country, were
selected from all age and income groups and surveyed for the
report titled “The Cost of Poor Customer Service: The Economic
Impact of the Customer Experience and Engagement.” Consumers
were asked about the frequency of their interactions with
businesses via the web, through contact centers and with their
mobile devices. They were also asked to identify the impact of
those interactions on their purchasing decisions.
Reasons Consumers Leave
Consumers across all countries cited key reasons that they
leave. Assisted service is well developed, with the overwhelming
majority of consumers saying their most satisfying experience
occurred because of a capable and competent customer service
representative. But self-service that is not intelligently
integrated with assisted service is a key area of concern.
Consumers feel the most significant root causes of poor service
are:
Being trapped in automated self-service
Being forced to wait too long for service
Repeating themselves
Representatives that lack the skills to answer their enquiry
Some interesting differences occur regionally. For example, in
many European countries, including Germany, the Netherlands,
France, the UK, and the Czech Republic, a significant portion of
consumers said one of their greatest sources of frustration was
being unable to reach customer service without paying a charge
for the call: 29 per cent of consumers in Germany said so; in
the Netherlands 25 per cent mentioned this; nearly 10 per cent
of Chinese consumers also cited this as a source of frustration.
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 was conducted
by Greenfield Online. The survey was sponsored by Genesys
Telecommunications Laboratories, Inc., an Alcatel-Lucent company
(Euronext Paris and NYSE: ALU), in collaboration with industry
analysts at Datamonitor/Ovum.
The survey group represented virtually every age and income
bracket of consumers in the U.K. 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," said Daniel
Hong, Lead Analyst of Customer Interaction at Ovum. "We're
advising enterprise businesses 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."
Common Wish Lists
There were some broad areas of agreement among consumers from
many regions. Three common threads emerged among all countries.
First, consumers are demanding better integration between
self-service and assisted service, including voice self-service
and eServices.
The most requested improvements in all countries
were to be able to start in voice self-service or the Web and
get live assistance from an agent, and to start in e-mail and
have better integration with agent-assisted service. In other
words, “Don’t ask me twice.”
Most Requested improvements
When asked what they would most like to see companies deploy to
improve service, 40 per cent chose human service, but more than
half of consumers chose at least one new communication channel
among their top choices. In other words, "Treat my interactions
as a conversation."
Over 18 per cent selected as their first
choice better integration of communication channels, 16 per cent
chose enriched content such as video, and 16 per cent chose web
assistants or avatars.
Greatest Sources of Customer Satisfaction
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:
Competency
Convenience
Proactive engagement
Personalisation
Proactive outreach emerged as an area in which consumers want
greater engagement. More than 86 per cent 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.
About Genesys Telecommunications Laboratories, Inc.
Genesys is a leading provider of software to manage customer
interactions over the phone, Web and mobile devices. Info:
www.genesyslab.com.
About Alcatel-Lucent
Alcatel-Lucent (Euronext Paris and NYSE: ALU) is the trusted
partner of service providers, enterprises and governments
worldwide, providing solutions to deliver voice, data and video
communication services to end-users. Info:
www.alcatel-lucent.com.
For a complete copy of “The Cost of Poor Customer Service: The
Economic Impact of the Customer Experience and Engagement”
survey, please contact press@genesyslab.com.
