Whether you're a large retailer or small business, the importance of good customer service cannot be underestimated. This is especially true in a business environment that is growing increasingly more competitive. But according to a new a new international consumer survey from Genesys Labs in conjunction with Datamonitor/Ovum called "The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement," the cost of customer service in 16 major industrialized economies causes businesses to lose a total of $338.5 billion per year when customers defect and abandon their purchases as a direct result of poor customer experiences. A total of 8,880 consumers, at least 500 from each country, were selected from all ages and income groups and surveyed for the report.
The hardest hit industries across all countries surveyed are financial services, cable, and satellite TV providers, and a variety of telecommunications companies. The average value of each lost relationship across all countries surveyed is $243 per year. Losses were defined as transactions taken to a competitor (63 percent of the total) and transactions abandoned entirely (37 percent of the total).
The survey asked consumers their priorities and the changes most needed to improve the quality of their customer service experiences. Consumers surveyed reside in: Australia, Brazil, Canada, China, Czech Republic, France, Germany, India, Italy, Mexico, Netherlands, New Zealand, Poland, Russia, the U.K., and the United States.
Some highlights of the survey include:
- In the past year financial services firms saw more than $44 billion in lost revenue.
- Cable and satellite TV providers alone suffered more than $37 billion of losses.
- Wireless carriers and Internet service providers each had $36 billion in lost revenue.
- Landline carriers also lost $33 billion.
- When asked to select the industries that did the best and worst job of customer service, consumers gave the most positive ratings for consumer products, travel/hospitality, and financial services. The most negative ratings are for telecommunications and government.
- When asked why they leave, consumers cited self-service that is not intelligently integrated with assisted service, being trapped in automated self-service, being forced to wait too long for service, having to repeat themselves, and representatives who lack the skills to answer their inquiry.
- When asked what they would most like to see companies deploy to improve service, 40 percent chose human service, but more than half of consumers chose at least one new communication channel among their top choices. More than 18 percent selected as their first choice better integration of communication channels, 16 percent chose enriched content such as video, and 16 percent said Web assistants or avatars.
- More than 86 percent of consumers defined proactive engagement as a strong benefit when stuck on the Web or in some form of self-service.
Daniel Hong, lead analyst of customer interaction at Ovum, said the difference between delivering exceptional customer service and merely providing acceptable service is pronounced in this survey. "Differentiating on service, especially in service-centric industries, such as finance and telecommunications, is how enterprises can retain customers in today's challenging business climate."