Poor Customer Service is Top Reason Consumers Switch Service Providers

Despite the increased use of new technologies intended to improve customer service, such as automated phone systems and live chat over the Internet, poor customer service is the primary reason that consumers switch service providers, according to results of a study released by Accenture.

Nearly half (49%) of the more than 2000 USA and UK consumers surveyed said poor service led them to change service providers in at least one industry in the past year. When asked to further explain their reasons for switching, the greatest number of these respondents (61%) identified poor service or product quality, to get lower prices (46%), a service representative's lack of knowledge about a provider's services or products (39%), lack of customized solutions (22%), company policies that create bureaucracy (19%), and technologies that delay or stop service (19%).

In addition, despite companies adopting technologies to help them respond more effectively to customer concerns, nearly two-thirds (62%) of all survey respondents said they believed that customer service had not improved significantly in the last five years.

"These findings are troubling for any industry with heavy customer interaction, given that poor service was the predominant reason that nearly half of the respondents gave for changing service providers in one industry or another last year," said John Freeland, global managing partner of Accenture's Customer Relationship Management practice. "Winning companies strike the right balance between using technology to help reduce costs and streamlining the customer experience with well-considered processes that contribute to more personalized services."

Approximately one-third (34%) of the respondents said that the most important aspect of a satisfying customer service experience is the ability to obtain assistance from a company without being forwarded to multiple representatives.

However, when respondents were asked to choose the scenario that best describes the typical customer service experience, more than half (54%) of them likened it to driving in slow city traffic that also required them to take many alternate routes to reach a destination. By contrast, only 13% said customer service was like finding a good short cut to avoid a traffic jam.

"Customers really want their service experience to be more like a good short cut - they expect the first customer service representative they talk with to have the knowledge, tools and capabilities required to address their needs," said Robert Wollan, managing partner of Accenture's Customer Contact Transformation business . "Leading companies use technology to deliver streamlined, self-service capabilities that quickly and effectively filter out solvable problems, with a carefully synchronized set of agent-assisted capabilities that eliminate the frustrating effects of shuffling the customer around."

Indeed, survey respondents said the most frustrating aspects of interacting with customer service representatives were being kept on hold too long (selected by 78% of respondents) and needing to repeat information to multiple service representatives (75%). The survey found that consumers spend an average of six minutes on hold when seeking assistance via a telephone help line and that they speak to an average of 2.6 service representatives to resolve issues.

Other frustrations identified by respondents were: the inability of representatives to solve problems (selected by 69% of respondents); representatives trying to sell other services or products when contacted (55%); inflexible service (45%); slow responses (44%); not personable (43%); the lack of personalized solutions (43%); computers that are often down (36%); requests for too much personal information (32%); being asked too many personal questions (23%) and creating too much paperwork (14%).

Of the 10 service-related industries included in the study -- banking, Internet services, wireless telephone, home telephone services, utilities, cable/satellite television service, hotel, airline, life insurance and retail -- the most customer turnover occurred in the retail industry, with 19% of respondents saying they began to patronize a different retailer, such as a grocer or department store, in the past year due to poor service. Respondents were least likely to switch life insurance companies, with only 3% of respondents saying they did so in the past year due to poor customer service. On average, for any given industry, nearly 10% of respondents said they had switched service providers because of customer service issues."

Posted to the site on 27th July 2005