Possibly one of my biggest push buttons in business today is customer service – businesses are so focused on enticing new customers that they often disregard the value of their existing ones. The impact of this is highlighted in new research which estimates that UK businesses lose £12 billion every year as a result of poor customer service.
The research, conducted by NewVoiceMedia, shows that 93% of respondents have switched business at least once in the last year because of poor customer service and a third of 16 to 24 year-olds will post online if they are unhappy with the service they are receiving.
The statistics are impressive, but not surprising. For years companies have focused on making customer service as cost-effective as possible, rather than providing a genuinely valuable service. Now that social media has given consumers a public and increasingly powerful voice, brands are paying a hefty price.
The flip side of this is that after receiving good service, 71% would recommend the company to others and 44% would use the company more frequently.
In social media, customer service has been something of an afterthought and is still very much in its infancy. Research tells us that whilst 70% of marketing departments are involved in social media, only 19% of customer service teams are using social channels. As the buying power of Generation Y increases, brands will have to think carefully about whether they can afford to ignore it any longer.
Some companies, O2 being an obvious example, have really taken to social customer service and are succeeding in treating customers as individuals and responding in a human voice. What we need is for that to be applied to all customer service channels and to see a joined up approach between them.
A quarter of adults believe the UK’s general levels of customer help are under-par – with telecoms, energy companies, banks and building societies coming under fire for providing the very worst service of all.
Customer satisfaction in the UK is at its lowest level since July 2010. Across all sectors the goalposts have moved and customers now expect to be involved in a real dialogue with brands – they no longer accept one-way communication. Yet many organisations are struggling to grasp this shift from a transactional to a relationship economy.
One key indicator of this dissatisfaction is how customers view the responsiveness of organisations. According to The Institute’s latest UK Customer Satisfaction Index (UKCSI) some of the biggest frustrations that customers have relate to the speed of complaint handling and the attitude and abilities of staff. Under these two metrics, organisations are still scoring, on average, lower than they were in 2013. In a new economy this deficiency must be addressed, given that it is speed which plays such a significant role in customer service.
The reputational risk of inaction has never been higher, with evidence suggesting that one in three customers will turn to social media for a resolution if they want a rapid response.
On top of these pressures, many businesses have struggled to make the necessary significant investment of time and money in customer service, as budgets tightened during the global economic downturn. A short-term approach will not make an impact on revenues and profitability, so where should this investment be focused?
But why is British customer service so bad?
Customers should be at the heart of the sales process, empowered by technology. Yet in most cases it seems as though technology is taking on the role of dealing with customers. Even when you navigate the myriad of options on the phone and get through to a human, most answers that they provide are robotic.
So, what is the conclusion:
First and foremost, a customer service culture needs to be led from the top so that there is a clear and visible objective. There is no quick fix – its importance must be instilled across and throughout the business. After all, the impact on the bottom line is significant. The retail food sector demonstrates this – our research shows that companies performing above average in terms of customer satisfaction outperform their below average competitors by up to 3%.
Leaders must ensure that all employees have the requisite skills and authority to deal with difficult customer complaints. Customers can come into contact with any member of staff through social media, telephone, email or a face-to-face meeting, making it crucial that employees are supported and have the emotional intelligence to deal with issues in a consistent, appropriate manner.
For this to happen, management must also give greater independence to individuals, allowing them to manage the speed of response that will win customers over and ensure their loyalty. For too long, customer-facing staff have been seen as a low paid and low skilled group that can be brought in seasonally. But they represent the organisation at the most important time – when dealing with customers.
With over 70% of the UK’s working population working in customer-facing roles, making customer satisfaction central to any business’ objectives should be obvious. The likes of Morrisons and Halfords have led from the top on this issue with appointments of customer-focused CEOs, but there is a long way to go.
If the UK is to accelerate growth, businesses of all sizes must appreciate the changing dynamic of the customer-brand relationship. If they do not, they will lose market share to their competitors that get it.
John Russell once said:
“The more you engage with customers, the clearer things become and the easier it is to determine what you should be doing”