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Accenture

Customer service long has been recognized as an area thathas a significant impact on a company’s top and bottomlines. In fact, Accenture research has found that one of thehallmarks of high-performance businesses is their abilityto create and exploit a set of distinctive, hard-to-replicate capabilities –which include those related to customer service – that differentiatethem from their competitors.

Customer service long has been recognized as an area that has a significant impact on a company’s top and bottom lines. In fact, Accenture research has found that one of the hallmarks of high-performance businesses is their ability to create and exploit a set of distinctive, hard-to-replicate capabilities – which include those related to customer service – that differentiate them from their competitors.

Furthermore, recent Accenture research into the characteristics of high-performance marketing organizations has revealed that customer service is critical to developing and maintaining the branded customer experience which, in turn, is a fundamental contributor to strong customer loyalty and higher lifetime customer value. In short, service often spells the difference between mediocre companies, poor performers and market leaders.

Yet while service is absolutely critical, it also is one of the most difficult things for organizations to get right. This dilemma is reflected in the fact that what companies often believe is “good” service may not be held in the same regard by their customers. In fact, it’s not at all uncommon for companies to invest in new customer service technology solutions and processes – believing they are improving their capabilities in this critical area only to see customer complaints and defections rise.

To shed light on what customers think about customer service, and the impact that bad service can have on a company’s business, Accenture recently conducted a survey of a representative sample of more than 2,000 people across the United States and the United Kingdom. The survey explored several key issues, including:

• Satisfaction with different methods of customer service;
• Impact of technology on service quality;
• Most frustrating aspects of dealing with customer service representatives;
• Actions taken in response to bad service; and
• Most important aspects of a satisfying customer service experience.

Responses from survey participants are illuminating, and suggest numerous opportunities for companies to improve the way they handle and resolve customer issues – and create some of the distinctive capabilities that are key factors in achieving high performance.

Customer Service Shortcomings Remain Pervasive

In general, responses from survey participants reveal significant opportunities for companies to improve the way in which they serve customers. For instance, customers in the United States and the United Kingdom spend an average of six minutes on hold when seeking assistance via a telephone help line. Twenty-seven percent of respondents said they typically wait between five and 10 minutes, while 14 percent said they wait for longer than 10 minutes before they can speak to a live person. Furthermore, 87 percent of participants said they speak to multiple representatives when calling customer service, with most speaking to two (37 percent) or three (32 percent) representatives to resolve their issue. Incredibly, 13 percent said they deal with four or five representatives, and an additional 2 percent actually must work through six to 10 people before they can declare victory.

Given this input, it shouldn’t be surprising that the two most frustrating aspects of dealing with customer service representatives cited by survey participants are being kept on hold too long and being asked to repeat information to multiple representatives (see Figure 1). Third on the frustration list is representatives’ inability to answer customers’ questions, followed by representatives’ attempts to sell customers other services or products.

The next tier of frustrating aspects includes representatives’ inflexibility, slowness to respond and nonpersonable nature, as well as the lack of customized solutions being offered and the frequency of representatives’ computer systems being inoperable when a customer calls.

Geographically, respondents in the United Kingdom are more likely than their U.S. counterparts to find it frustrating when they are kept on hold too long, representatives are inflexible and slow to respond, and representatives’ computer systems are inoperable at the moment a customer contacts them. A greater percentage of respondents in the United States than the United Kingdom reported being turned off by representatives’ cross-selling or up-selling.

Frustration also differs among other customer subgroups. For instance, a higher percentage of women than men reported being frustrated by nearly all of the customer service shortcomings just discussed. Younger people are more likely than middle-aged and older respondents to dislike cross-selling and up-selling. And high-income respondents are more likely than mid- and low-income customers to find representatives’ inability to answer questions and provide customized solutions frustrating – but are less likely to be turned off by crossselling or up-selling.

Satisfaction Is Not High

Companies have invested millions of dollars during the past several years in CRM to improve the way they service customers. For many of these companies, the bulk of that investment was directed toward new technologies that, in the interest of cutting customer service costs, largely removed human interaction – at least of the “live” variety from the service experience. While such technologies generally achieved the goal of saving the company money, they often did little to improve the service experience or quality (and in some cases, they alienated customers altogether). Responses from survey participants support this notion (see Figure 2). Just 5 percent strongly agree and 33 percent somewhat agree that the use of technology has improved the level of service quality significantly in the past five years. A full 62 percent of respondents either somewhat or strongly disagree that technology has helped the cause.

Yet not all customer groups viewed the issue in the same way. Customers in the United States (43 percent) were more likely than those in the United Kingdom (35 percent) to believe technology has improved customer service. Likewise, women were slightly more positive than men about technology’s impact on service. From an income perspective, it appears that the more money one makes, the less happy one is with customer service technology. Forty-two percent of lower-income respondents somewhat or strongly agreed that technology has improved service, compared with 39 percent of middleincome customers and just 31 percent of high-income participants.

As might be expected, younger participants in the survey expressed more positive attitudes toward service technology, with just under half (47 percent) concurring with the notion that technology has improved the level of customer service. This compares with 36 percent of respondents in the middle-age group and just 29 percent of those 55 years of age or older.

Survey participants’ negative views of technology’s impact on service are further revealed by their responses to questions about satisfaction with various types of customer service (see Figure 3). Overall, customers are least satisfied with service delivered via automated phone systems, one of the more common results of companies’ focus on cost reduction. Just fewer than 60 percent of respondents said they are not at all satisfied with how they’re treated by such systems, while only 10 percent said they are satisfied or very satisfied.

Another type of service that relies heavily on technology is emailbased interactions. This method fared much better in our survey than automated phone systems, as 44 percent of customers said they were either satisfied or very satisfied with it and 38 percent noted being somewhat satisfied. Similarly, the emerging concept of service via a live online chat function is beginning to gain favor with customers, as just over half of survey respondents reported being somewhat satisfied, satisfied or very satisfied. However, unlike other service options, chat has yet to achieve widespread penetration among most companies’ customers, especially those in the United Kingdom. A full 40 percent of all survey participants (47 percent in the United Kingdom and 32 percent in the United States) said they couldn’t comment on their satisfaction with service via online chat because they had yet to use it.

Based on our survey results, customers clearly prefer interacting with representatives live and through traditional means – either on the phone or in person.

Overall, 49 percent of respondents said they were satisfied or very satisfied with the level of service they receive via the phone from a live customer service representative. U.S. respondents were definitely more positive about their live phone experiences than their U.K. counterparts, as 58 percent of the former and just 40 percent of the latter reported high levels of satisfaction with this mode of customer service.

The big winner in customers’ eyes is still being able to discuss their issues with a representative face to face. Sixty percent of all survey participants said they were satisfied or very satisfied with in-person customer service. Again, a larger percentage of U.S. customers (64 percent) than U.K. respondents (56 percent) reported such satisfaction levels, but there was little appreciable difference in the responses when viewed by respondents’ gender, income or age.

Impact on Business Can Be Significant

If companies don’t think that their lackluster track record – at least in customers’ eyes – has an impact on their business, they need to think again. Nearly half of our survey respondents said they have switched providers in the past year because of poor customer service (see Figure 4). Of those, the largest percentage switched banks, home telephone service providers, Internet service providers, utility companies and wireless/cell phone service operators. Interestingly, two industry segments that are well-known for their customer service struggles – airlines and cable/satellite television providers – were among those switched least by participants in our survey.

On the other hand, customers did recognize industry segments in which they felt companies were providing satisfactory and quality service (see Figure 5). Banks led the way, followed by Internet service providers, retailers, airlines, cable/satellite television providers and home telephone service providers. Yet despite being among the “least-switched” type of companies due to poor customer service, wireless/cell phone service operators and hotels were named by only 30 percent and 35 percent of survey participants, respectively, as having satisfactory and quality service.

Improving the Experience

So what do customers really want from a company’s customer service function (see Figure 6)? Although respondents did not reach a strong consensus on the most important aspect of a satisfying customer experience, one item – named by 34 percent of all survey participants – did stand out from the others: the ability for a customer service representative to assist with all needs, rather than forwarding a request to different representatives for help with each product or service. In the second tier of aspects critical to a good service experience are the following:

• Ability to discuss problems with representatives;
• Amount of time it takes to resolve a problem;
• Quality of the response from the representatives; and
• Customer service representatives’ manner and approach.

Rounding out the list are aspects named by less than 10 percent of respondents, including speed of response, convenient bill payment options, benefits offered to compensate customers for their troubles, and bills that are easy to understand.

These responses suggest a number of steps that companies can take to improve their own customer service activities and provide the satisfying service experience that customers seek. The first step should be boosting customer insight capabilities – with the understanding that it is impossible for a company to provide customers with great service if it doesn’t know anything about them. To do so, a company must create a single view of the customer, which typically depends on having a data warehouse into which all relevant internal customer data – often widely dispersed throughout the organization – is fed. This data includes customer contact information, products or services purchased, mode of purchases (Web, store, call center, catalog) and monetary value of purchases. Importantly, this information must be augmented by external demographic data on customers. By combining a customer’s transaction history with key data such as number and ages of people in the customer’s household, median income of the customer’s neighborhood, and the customer’s ethnic heritage, a company can transcend the one-dimensional, internal picture of a customer that purchase history alone provides.

With a single view of the customer, a company is positioned to interact with customers on customers’ terms and provide them with the help and information most relevant to customers’ situations. A complete picture of customers’ histories and preferences enables a company to develop an overall customer experience blueprint: one that plans for the optimal customer experience along the entire spectrum of customer segments and value. Whether for a low-value customer or a platinum account, the blueprint designs the right customer experience for each customer segment, making the design truly actionable and providing an underlying financial model to track operational improvements and bottom-line impact. The blueprint makes sure companies achieve the best possible balance between customer satisfaction and customer cost-to-serve.

For example, the customer experience blueprint can help companies determine which customers prefer and merit service via automated, technology-based channels – email, online chat and automated phone systems – and which should have their issues handled by a live representative. Such a determination ultimately will boost customers’ satisfaction with the service and the mode in which it was rendered.

For those issues that must be handled by a live person, a single view of the customer provides all customer service representatives with complete customer information (including demographics and service and purchase history). This information reduces the number of questions representatives must ask customers and minimizes the amount of time it takes to resolve customers’ issues. When access to an integrated customer database is paired with new desktop applications and workflow management tools, agent productivity and responsiveness to customers is boosted even further. For instance, agents at some leading organizations are more effective at serving customers because their tools give them access, through natural language query, to multiple knowledge sources to find the information they need regardless of the product or service in question. Customers, thus, do not have to be handed off to different representatives – thereby eliminating one of the principal sources of customers’ frustrations.

To address the workforce-related challenges that survey respondents identified, a company can further empower its service representatives by providing them with more sophisticated and relevant career development programs. In fact, leading companies are discovering that investments in desktop tools will only pay off in increased customer loyalty and lower costs if they are accompanied by better training and performance support. Training and performance simulation tools available through the workers’ own desktops can help instill the appropriate “manner and approach” that customers want in a service representative. Such tools can, for example, enable agents to review short multimedia segments on new products or services, or practice interactions with customers in a lifelike but risk-free environment.

Finally, access to integrated customer data, more robust tools and better training can improve representatives’ ability to customize solutions to specific customers – as well as recognize and maximize an opportunity to cross-sell or up-sell. A large percentage of survey respondents noted being frustrated by representatives’ attempts to sell them other products and services. So does that mean companies should not cross-sell or up-sell? No, because a high percentage of respondents also said they’re frustrated by the lack of customized solutions offered to them. Organizations need to choose carefully the situations in which their representatives offer other products and services to customers, and to make sure that what’s offered is relevant to each customer. It shouldn’t be surprising that a customer calling with a complaint about a company is not in the best frame of mind to be asked to buy more. And nothing frustrates a customer more than being asked to buy something he or she already has, rightly feeling that the company should know who buys what.

To be sure, customer service is a critical factor in a company’s ability to compete in its market and grow profitably. By understanding what customers expect when dealing with service representatives, and making the changes necessary to accommodate customer needs and preferences, companies will be better positioned to enable high performance by providing the branded customer experience that is fundamental to building strong customer loyalty and higher lifetime customer value.