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Contact Center Solutions Featured Article

November 19, 2009

Survey Reveals Poor Customer Service Costs $338.5 Billion Per Year

By Calvin Azuri

TMCnet Contributor

A new international survey of consumers has revealed that poor customer service in 16 industrialized economies causes businesses to lose $338.5 billion per year. The survey found that the industries that have been hardly hit across all the countries are financial services, cable and satellite TV providers as well as a variety of telecom companies.

It has been estimated that the average value of each lost relationship across all countries surveyed is $243 per year. Losses have been defined as transactions taken to a competitor and transactions abandoned entirely. Financial services firms lost more than $44 billion in lost revenue in the previous year. In fact, cable and satellite TV providers alone suffered more than $37 billion of losses.

Even though some industries like financial services were hardly hit, they were viewed more positively than negatively. However, in the case of industries like telecom, negative sentiment outweighed positive sentiment by a two-to-one ratio. The survey also asked consumers to select the industries that did the best and worst job of customer service. The most positive ratings were received by consumer products, travel/hospitality and financial services.

The survey was conducted on 8,880 consumers from all age and income groups. The report titled, “The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement,” quizzed respondents about the frequency of their interactions with businesses through the Web, contact centers and mobile devices.

In addition, the survey asked respondents to identify the impact of those interactions on their purchasing decisions. According to the consumers, the significant root causes of poor service are being trapped in automated self-service, being forced to wait too long for service, repeating themselves as well as representatives that lack the skills to answer their inquiry.

The 28-question survey of consumers was conducted by Greenfield Online. The survey was sponsored by Genesys (News - Alert) Telecommunications Laboratories, Inc., an Alcatel-Lucent company in collaboration with industry analysts at Datamonitor/Ovum.

According to Daniel Hong, lead analyst of Customer Interaction at Ovum (News - Alert), differentiating on service, especially in service-centric industries like finance and telecommunications is how enterprises can retain customers in today's challenging business climate. The survey revealed that consumer satisfaction increases when companies meet the four key needs of competency, convenience, proactive engagement and personalization.

The survey asked consumers their priorities and the changes most needed to improve the quality of their customer service experiences. It was found that there are some broad areas of agreement among consumers from different regions.

For example, consumers are demanding better integration between self-service and assisted service. The most requested improvements in all countries were to be able to start in voice self-service or the Web and get live assistance from an agent, and to start in email and have better integration with agent-assisted service.

When respondents were asked what they would like to see companies deploy most to improve service, more than half chose at least one new communication channel among their top choices.
Calvin Azuri is a contributing editor for TMCnet. To read more of Calvin’s articles, please visit his columnist page.

Edited by Kelly McGuire

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