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Good service... it’s cheaper than you think

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Date: 
Wednesday, June 14, 2017

Customer surveys are a great way to find out what people really think, which is why large companies around the world regularly carry out surveys. Some even employ other companies to perform them, as this means the results are fair and unbiased. This week, we’re looking at some of the things that such surveys reveal about customer service.

In a 2012 survey by Accenture, 80% of businesses said they deliver “superior” customer service. Great! Well, Accenture also asked those companies’ customers what they thought, and only 8% believed that they had received superior service.

Furthermore, 20% of consumers switched to a different service supplier in 2012 because of poor customer service, while 55% cancelled a transaction for the same reason. The survey also looked at the causes of customer dissatisfaction:

Deception: 78% of consumers would leave a provider if what was promised was not what was delivered

Bad attitude: 77% would leave if they received unfriendly or impolite service

Incompetence: 73% would leave if they had to contact the supplier more than once for the same problem

Inflexibility: 71% would leave if the policies or conditions were unfair and/or too rigid

Lateness: 65% would leave if the company failed to answer a phone or deal with the consumer promptly, or if the goods or service were delivered later than promised

In fact, almost all the surveys we’ve looked at reach the same conclusions, regardless of business sector or geographical location: customers consistently rate service as the most important aspect of their purchasing experience; around 66% of customers are willing to pay more for good service; consumers tell on average 24 other people about a bad experience, but only 15 about a good one; and it costs much more (many estimates say 500%) to acquire a new customer than to retain an existing one.

Some years ago, Sprint, a large US phone company, was ranked as one of the worst in the industry for customer service. At the same time, Sprint was spending twice as much as it does today on customer service, because it was dealing with more support calls and issuing refunds and credits to unhappy customers. Sprint also had to spend a large amount of money on advertising and promotions to bring in new customers, as it was losing so many customers to its competitors.

By fixing the problems and training everybody in good customer service, Sprint reduced the complaints. In fact, the complaint calls reduced so dramatically, the company was able to close 29 call centres within two years. Sprint is also now gaining customers from its competitors, all while spending less on customer service, advertising and promotions.

As the CEO, Dan Hesse, summarises, “Great customer service costs less. When we were last in the industry, we were spending twice as much”.

DEPARTMENT OF INFORMATION

OFFICE OF THE CHIEF SECRETARY