Customer expectations are getting higher and higher and companies that don't respond "risk becoming irrelevant and, ultimately, obsolete," according to Accenture.
Posted Jan 8, 2008
A surprisingly high percentage (33 percent) of consumers have higher service expectations than they did just a year ago, according to new findings by New York-based consulting firm Accenture. The 2007 Accenture Global Customer Satisfaction Survey, administered online to more than 3,500 consumers over the age of 18, also found that customer inclination to switch to another service provider has increased for the third straight year. For the first time, the study examined customer expectations in regions outside of the United States and the United Kingdom, and found that there's a universal truth: Companies all over the globe need to do a better job satisfying their customers.
Customer service has become a primary differentiator due to a shrinking product-development window and the commoditization of products and services. Respondents said that poor customer service is one of the main reasons they switch providers -- regardless of whether companies are in a developed or emerging market -- and 59 percent of them have switched within the past year. Forty-one percent rated their customer service as "fair," "poor," or "terrible," while only 5 percent considered their experience to be "excellent." Seventy-seven percent of consumers say they're more likely to continue doing business with a company if the experience is good.
Consumer expectations continue to increase rapidly. An overwhelming 93 percent of respondents reported that they have higher expectations today than they did five years ago, and 75 percent said their expectations have increased since last year. "You'd say, 'Well, it's a changing market,' but look at a country like Brazil, which is not in the same kind of place [as China]," says Robert Wollan, global managing partner for service transformation for CRM at Accenture. But the similarities outweigh the differences: Both China and Brazil are seeing high provider-switch rates, for example -- 85 percent and 75 percent of respondents, respectively.
Another interesting finding, Wollan says, is the fact that consumers believe that if they spend more, they should get better service. Companies, he explains, often just try to create the single best experience possible, all day, every time. This is no longer sufficient: Consumers want to see a change in the service they receive given their change in behavior. As a simple example, when someone pays more for a plane ticket, they can be bumped up to first class. "Customers say very clearly that whether it's an individual purchase pattern, or individual capabilities, they expect something different," Wollan says, adding that "this is where the 'eye of the beholder' becomes an important dialogue."
In a race based on ability to deliver quality service, Wollan says that the industry is being divided into two groups: those who excel at customer service and those who don't. "Customers put you on one side or the other very quickly," he says. "And that has a pretty significant impact on folks who are trying to change." Companies don't want to stay in the latter group, he adds, but many have hit a plateau and are struggling to find the "X" factor that will bump them up on the customer-satisfaction scale.
Wollan's tips for achieving a break-out strategy include the following:
According to the survey, retailers, banks, and Internet service providers have the highest percentage of customers switching because of poor customer service, while hotels, airlines, and life insurance providers, have the lowest--probably, Wollan says, because customer expectations in those verticals are already relatively low.
- Make sure your improvements are of value to the consumer.
- Make your improvements noticeable to the consumer.
- Get a better sense of your customers and what they value (e.g., in the telecommunications space, China's consumers ranked receiving a quick response as their number-one concern, whereas getting a human agent -- the top demand in the U.S. and U.K. -- ranked relatively low).
- A segmented strategy works far better than a broad-brush approach. When changes are made, it's important to utilize segmentation to be both noticeable and relevant (e.g., recognize that some consumers view self-service technology as "outsourcing to the consumer," while others may view it as empowerment).
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