A Worldwide Cauldron of Disloyalty, Dysfunction and Disconnects: Business To Business Customer Service
by Brian Sprague, Accenture
Like the global economy these days, business-to-business customer service in the communications services, communications equipment, electronics and high-tech industries amounts to a cauldron of disloyalty and disconnects in need of swift and extensive repairs.
Consider these problems: During 2008 customers in Asia, Europe, Latin America and North America switched corporate customer service providers due to poor customer service at an average combined rate of 30 percent. Annually, these customers were spending an average of $15 million on products and customer service with these businesses. The result: Revenues and customers gone. Now consider this: Businesses in these industries give away 28 percent of their customer service for free because they lack insight into what support services their business customers are entitled to receive. Revenues gone and customer focus flawed.
Add this to the equation: Many of these businesses providing customer service grade their service quality much higher than their customers do. Credibility gone. These businesses also under perform in delivering the support services their customers value most. Customer satisfaction gone. In addition, these companies lack necessary technologies and training resources. Prowess gone. Disconnects and deficiencies run amok.
These troublesome findings surfaced in a recently completed Accenture research project consisted of two simultaneously administered online global surveys, one for businesses providing customer service and the other for customers receiving that service. In all, approximately 900 executives were queried from 12 countries: Argentina, Brazil, Canada, China, France, Germany, Great Britain, Italy, India, Japan, Mexico and the United States.
Following are a few high-level takeaways: By region, North Americans are the most loyal customers when they receive superior customer service; Asians are the least loyal. The Chinese have the highest switching rate (55 percent) due to poor customer service; Argentineans have the lowest (7 percent) (The United States ranked seventh at 22 percent. See chart for complete ranking). Meanwhile, Latin Americans lag in technology and training compared with the other three regions.
By country, more French have considered switching (44 percent) than the other European countries surveyed. Great Britain lags far behind the other European countries queried in training and technology. Indians have highly inflated evaluations of the quality of customer service they provide compared with their customers. And the Japanese are the toughest self-critics of the quality of their customer service.
Delving deeper into regional findings, several intriguing contrasts materialized. Thirty-six percent of Asians have switched business customer service providers in the past year due to poor customer service, more than Europeans (26 percent), North Americans (21 percent) and Latin Americans (18 percent). Reasons for this include rising expectations of Asian customers and their comparatively lagging customer service capabilities.
More than two-thirds of the businesses providing customer service indicated that it has been a significant challenge to train new support technicians to be able to deliver high-quality service and support. This turned out to be especially true for providers from Latin America (92 percent) but less so with North America (61 percent), Europe and Asian (49 percent each). Why? For many years Latin America has had a non-competitive business environment in the technology industry, especially within telecommunications. As a result, investments in training, processes and workforce have not been top priorities.
When providers from all four regions were asked why they are challenged in delivering superior service, the three reasons providers cited most often were their lack of supporting technology (selected by 30 percent of respondents), a dearth of trained resources (29 percent), and non-existent definitions of support processes (22 percent).
A superior experience with a provider encourages loyalty for 67 percent of all the customers surveyed. Such an experience had a stronger impact in North America than elsewhere. Among North Americans, 78 percent indicated a superior experience increases their customer loyalty, exceeding Latin Americans (67 percent), Asians (61 percent) and Europeans (55 percent).
Despite these problems and contrasts, respondents from all four regions shared the view that the two most important factors in creating a superior and differentiated customer service experience were, first, the quality/competence of service personnel (56 percent average); and, second, the ability to address the problem on the first call or email (51 percent average).
Further exploration of country findings revealed that Europe is a particularly tough region to provide and receive customer service. Forty-four percent of Italians and 24 percent of British customers surveyed have switched providers. These percentages placed these two countries in the top six switchers of the 12 countries surveyed. In response to a similar question--“have you considered switching providers during the past year due to poor customer service?”— the French ranked first among European countries with 44 percent, and second among all countries (China ranked first with 52 percent).
In Great Britain, technology and training are tough situations. Survey results pinpointed acute problems the country’s providers have been struggling with that did not surface in findings from the other 11 countries. For example, 86 percent of providers indicated training new support technicians to be able to deliver high quality service and support presents a major challenge—far exceeding all other European countries surveyed.
Similarly, 71 percent of British providers indicated that a lack of supporting technology is the biggest barrier to delivering superior customer service; none of the other European countries ranked this as the biggest barrier. This gap will likely continue because of the expected decline of entrants, compared with projected demand, into these technical roles.
French respondents were among the toughest critics of their service providers. In response to the question “How would you rate your satisfaction with the overall service and support?” France ranked 42 percent “extremely low,” doubling the percentage of any other European country surveyed.
Within the four European countries, a gap emerged between customers and providers on the issue of “the ability to address the customer’s problem or issue on the first call or email.” Customers consistently rated this service much higher than they rated providers’ performance delivering this service.
In India customer service providers overestimated many aspects of their service and support delivery—much more so than the other surveyed countries. Nearly 88 percent of providers think they have retained their customers through superior customer service and support. But 44 percent of their customers indicated they had switched providers in the past year due to poor customer service. Furthermore, less than 10 percent of Indian customers surveyed rated their providers as performing extremely well. This high level of dissatisfaction often occurs in such emerging markets as India, and is even more pronounced in this country because many citizens there have been exposed to high service levels in other countries.
Japanese providers revealed themselves to be particularly tough critics of their own performance. Fifty-eight percent indicated that the “quality and competence of the service personnel I deal with” is important. But only 7 percent gave themselves a strong ranking in this category. The importance of the personal interaction is a key cultural aspect of work in Japan. Companies able to establish a more personal connection in their service operations are rated much higher.
So what should be done about all these problems? Here are a few ideas:
During this global economic crisis, the bottom line is this: Companies in all four regions surveyed need to sharpen their customer focus and invest more in this arena. Now is not the time to back away until the recession ends. Now is the time to invest to be better positioned when the market turns around.
Brian Sprague is a Senior Executive with Accenture's Communications and High Tech industry group. He can be reached at email@example.com.