Customers are switching service providers in large part because of poor service; technology investments are not reducing the churn.
Posted Jul 26, 2005
Poor customer service is causing customers to switch service providers across industries, and new technologies are not doing enough to improve the situation, according to an Accenture report. Consumers spend an average of six minutes on hold and speak to an average of 2.6 CSRs to resolve issues, according to "Customer Service Standards: United States and United Kingdom." The most frustrating aspects of interacting with CSRs are being kept on hold too long (78 percent) and having to repeat information to multiple service reps (75 percent). But when asked about the most important aspect of a satisfying customer experience, 34 percent cited speaking with someone who could actually assist them without forwarding them to another person.
"The biggest perceived frustration is getting a live representative to begin with and then having to repeat a lot of information. Even after all these things, the rep doesn't have a view into why you're calling," says John Freeland, global managing partner of Accenture's CRM practice. More than half of respondents (54 percent) compared their typical customer service experiences to "driving in slow city traffic that also required them to take many alternate routes to reach a destination." By contrast, only 13 percent said it was "like finding a good shortcut to avoid a traffic jam, making the day much more fast and efficient."
Other frustration points, included cross-selling (55 percent), inflexible service (45 percent), CSRs who are not personable (43 percent), computers not working (36 percent), and requests for too much personal information (32 percent). Freeland called the cross-selling frustrations a double-edge sword. As organizations attempt to get more production out of their sales service organizations, they are receiving negative ratings by their customers, he says. "A lot of it depends on the context of why they're calling. There's not enough intelligence in the process to tell if [CSRs are] antagonizing them or if they'll be welcoming of the new products. Organizations must have sufficient customer insight before trying to captivate on that call."
Companies continue to invest in technology to gather such prized information, but 62 percent of survey respondents said they believed customer service has not improved significantly in the past five years. Freeland attributes this to a lack of training paired with enhanced customer expectations. "A lot of organizations have been under extreme pressure to lower customer service costs. They've overspent on technology and underspent on the human aspects that could contribute to the level of trust and intimacy," he says. "They've substituted technology for labor and underinvested in frontline workforce and their attitudes and engagements are the most important driver of customer satisfaction, not the technology."
Of the 10 service-related industries included in this study, the most customer turnover occurred in the retail industry with 19 percent saying they began to patronize a different store in the past year due to poor service. That was followed by banks (13 percent), home telephone services (13 percent), Internet services (12 percent), wireless telephones (11 percent), utilities (10 percent), cable/satellite television service (8 percent), hotels (6 percent), airlines (4 percent), and life insurance companies (3 percent). There is not a direct correlation with satisfaction level and abandonment, but it's easier to switch retailers or phone providers than life insurance companies, according to Freeland. The low turnover rate for airlines indicates price and other factors also contribute to satisfaction levels.
"Wining the war for the customer is something that never ends. In many of the industries, companies have gotten a lot better in terms of tying technology to customer service, but the standard of expectations keeps rising," Freeland says. "Customers used to cut you some slack because alternatives weren't that great. Now we live in a world of alternatives and customers tolerance for mediocrity is a lot lower. By substituting technology for the human touch, organizations run the risk of undermining customer loyalty."
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