Businesses not providing the customer service they think they are |
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By Barney Beal, News Director
24 May 2007 | SearchCRM.com |
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It's cheaper to keep an existing customer than to win a new one. Satisfied customers are more loyal customers. And it's easier than ever to spread the word about a poor customer experience.
Those nuggets of wisdom have been heard before in the context of CRM, but a new survey from Accenture backs it up with some hard data. The Bermuda-based technology, consulting and outsourcing firm recently surveyed 35 vice presidents at global consumer technology companies with revenues of at least $1 billion about their customer service efforts. It followed that up with a survey of 1,200 technology consumers. It found that the level of customer service that companies are providing does not match what they think they're providing.
"There's a stark contrast between the customer experience provided and what's believed to be provided," said Brian Sprague, lead partner with the customer services and support practice.
According to the survey, 75% of executives felt their customer service was moderately or extremely good, but 57% of consumers described themselves as upset or marginally to extremely dissatisfied with their experiences.
"Many consumer technology companies are alienating customers with average customer service," Sprague said. "When they do so, they risk losing three-quarters of their business to competition."
The correlation between experiences and customers leaving is pretty direct, according to the survey. It found that 81% of customers who rated their service satisfaction as "below average" said they will purchase from a different supplier the next time, and for those who rate their satisfaction as merely "average," the likelihood of buying from the same company drops from 51% to 27%.
Unfortunately for consumer technology firms, technology itself is a major culprit in dissatisfaction, with 61% of consumers saying technology has not improved customer service. Self-service technology, an area where businesses have spent millions in recent years to cut the costs of customer service, is turning customers off, according to the report.
"Vice presidents of customer service have a difficult challenge," Sprague said. "They need to balance the investments they make with the level of customer service, and historically they have been very focused on cost. What we've seen is a lot of backlash."
While 77% of the executives surveyed said they were focusing investments in self-service technology, consumers aren't seeing the benefits, Sprague said, particularly with interactive voice-response systems -- 42% of customers said they had to access customer-service channels several times to resolve their problems.
Rising expectations
Certainly, the expectations of customer service have evolved. Respondents uniformly said that life is better, but everyone expects more, Sprague said. Service in other industries, such as airlines, banks and utilities, affects what people expect from consumer technology.
Also, it's easier than ever to share a bad experience.
"It used to be you shared experiences around the water cooler and impacted maybe four people," Sprague said. "Now people get on their blog and tell 40 people or 400 people immediately."
There has been a slow realization of the importance of customer satisfaction, however, and consumer technology companies are beginning to shift away from their product-centric focus, according to Sprague. Given the low level of customer satisfaction, those that invest wisely could see a big return.
"If I can move from an average satisfaction experience to extremely high, people will buy two and a half times more from me," Sprague said. "That's a huge amount of incremental revenue."
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