telephone_commonsThe cost of poor customer service could be as high as $1.6 trillion, according to Accenture, which places much of the blame for poor customer service on digital customer interaction methods that have replaced human contact.

Enthused by their novelty and encouraged by investors and competition to cut costs, large businesses began replacing human customer service representatives with automated voice response and directory systems back in the 1980s. These digital voice response systems may have come a long way in terms of their ¨human¨ qualities and ease of use, but they still can be frustrating, awkward and too time consuming for customers’ tastes.

Accenture found that customers are demanding more human interaction to resolve customer service issues via digital channels, so much so that they’re switching to different providers due to poor customer service.

More than 8 in 10 U.S. consumers (83%) would rather deal with human beings than automated, computerized customer service systems to solve issues via digital channels. Nearly as many (77%), would prefer getting advice from human customer service reps, Accenture highlights in a press release.

Cost of Poor Customer Service
Over half  of respondents to Accenture’s survey (52%) switched providers during the past year because they were dissatisfied with business providers’ customer service. Cable and satellite television providers, along with banks and retailers, were found to be ¨the worst offenders.¨

Overall, Accenture analysts estimate that the overall costs that result from customers switching providers totals a whopping $1.6 trillion. Nearly half of consumers (45%) said they were willing to pay a higher price for goods and services if it would assure better customer service.

The research results are contained in ¨Digital Disconnect in Customer Engagement,¨ a report that’s part and parcel of Accenture’s 11th annual Global Consumer Pulse Research. Accenture surveyed 24,489 consumers worldwide (2,003 in the U.S.) in compiling data regarding their experiences and attitudes towards service providers’ marketing, sales and customer service.

In their drive to increase operational efficiencies “companies have lost sight of the importance of human interaction and often make it too difficult for consumers to get the right level of help and service that they need,” commented Robert Wollan, senior managing director, Advanced Customer Strategy, Accenture Strategy.

“Companies wrongly assume that their digital-only customers are their most profitable, and that customer service is a cost. Consequently they over-invest in digital technologies and channels and lose their most profitable customers – multi-channel customers – who want experiences that cover both digital and traditional channels.”

Lack of Human Interaction

Source: Accenture

Source: Accenture

More broadly, 8 in 10 consumers said companies make it difficult to do business with them, causing frustration. More than 7 in 10 (73%) said they expect customer service to be easier and more convenient. Six in 10 (61%) want it to be faster. More than 4 in 10 (44%) turn to social media channels in order to vent their frustration with poor customer service.

Consumers still place a high value on physical or in-store commercial experiences, according to Accenture. More than 6 in 10 (65%) agreed that in-store service was the best channel when it comes to meeting their individual wants and needs. Nearly half (46%) said they’re more willing to buy new or go for product upgrades if they originate from human as opposed to online interactions.

“U.S. companies have reached a tipping point in their customer’s digital intensity and need to re-balance their digital and traditional customer services investments if they want to improve loyalty, differentiate themselves and drive growth,” said Kevin Quiring, Managing Director, Advanced Customer Strategy, North America Lead, Accenture Strategy. “Companies abandon the human connection at their own risk and are facing the need to rebuild it to deliver the varied and tailored outcomes that customers demand.”

Nearly 7 in 10 consumers (68%) said they would not go back to their original service providers once they switched. But companies can take steps not to lose them in the first place, according to Accenture.

Eight in 10 consumers who switched agreed, saying they felt the company could have done something to hold on to their business. Eighty-three percent said their decision might have been different if companies had provided better live or in-person customer service.

Accenture outlines four measures businesses can take to remedy the situation:

  1. Put the human and physical elements back into customer services: Rethink your investment strategy. The focus should be on delivering satisfying customer experiences – not methods of interaction. Ensure your channel management approach delivers integrated experiences.
  2. Make it easy for customers to switch channels to get the experiences they want: Build customer service channels that enable consumers to fluidly move from digital to human interaction to get the outcomes they desire.
  3. Root out toxicity: Define and address the most toxic customer experiences across all channels. These experiences can directly impact profitability. Identify the experiences that have the greatest potential downside and leverage those insights to guide an investment strategy.
  4. Guarantee personal data security: 92 percent of consumers say it is extremely important that companies protect the privacy of their personal information. By not selling or sharing customer data with other companies, and guaranteeing that safeguards are in place to protect it, companies can help ensure that consumers will be more willing to hand over personal information which can be leveraged to deliver better experiences.
Image courtesy of flickr user drewleavy.