Bad customer service, disloyalty, and the way ahead

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By: Wise Marketer Staff |

Posted on August 15, 2006

Poor customer service caused nearly half of consumers to switch at least one of their service providers over the past year, according to a study by Accenture. And another study from Discover Card explains what consumers really expect.

The purpose of Accenture's online survey was to understand consumers' satisfaction with customer service, particularly as technology has assumed a major role in the delivery of service for most industries.

While nearly half (46%) of respondents reported they stopped doing business with a company in at least one industry category in the past year as a result of poor service, some industries fared worse than others.

Worst and best
Retailers suffered the greatest number of customer defections due to poor service (18%), followed by internet service providers (15%), banks (14%), home telephone service providers (12%), wireless/cell phone companies (11%) and cable/satellite TV service providers (10%).

Utility companies (3%) and life insurers (3%) suffered the fewest customer defections, followed by airlines (4%) and hotels (6%).

Technology failure?
But at the same time, newer technologies do not seem to be improving consumers' overall satisfaction with customer service, as 57% of respondents said that customer service technologies (such as automated phone service and live online chat) had not done anything to improve service levels.

Looking at the channels customers use, the survey found that satisfaction was lowest for automated telephone service, with only 15% of the consumers indicating they were "satisfied" or "very satisfied" with these self-service options.

However, 61% said they were "satisfied" or "very satisfied" with in-person service, followed by 57% who responded similarly about live telephone service, 40% for email services, and 31% for online chat.

Frustrating the customer
The survey also provided insights about which aspects of customer service most frustrated consumers. Those most frequently identified by the respondents included:

  1. Being kept on hold (on the phone) for too long (72%);
  2. Having to repeat information to multiple agents (70%);
  3. The inability of agents to answer questions (66%);
  4. Agents trying to sell more services or products (60%).

When asked to estimate the amount of time they typically spend on hold waiting for service, respondents, on average, said approximately seven minutes, with 47% of consumers identifying wait times of less than five minutes.

Telephone service findings
The latest Customer Service Survey from Discover Card confirmed Accenture's findings, with its own key conclusions on customer service preferences including:

  • Consumers want a fast and effective response by telephone. Reaching knowledgeable customer service representatives is "extremely important" to 65% of respondents, followed closely on the heels (64%) of the ease of reaching a "live" person on the phone, and resolving their issues in a single phone call (61%).
  • 65% of consumers consider a wait time reasonable as long as it is less than two minutes. Interestingly, 48% find wait times longer than two minutes unreasonable. When wait times extend past three minutes, 80% find it unreasonable. Only 26% of those surveyed could recall ever connecting with a representative in less than one minute.
  • Consumers overwhelmingly (73%) prefer to contact customer service using a toll-free number. Only 16% prefer to use e-mail, 9% prefer using online forms and 2% prefer online instant messaging.
  • When it comes to their feelings about contacting customer service in general, consumers tend to be polarised: 56% said they don't mind contacting customer service at all or very much, while 44% said they dislike it (with a quarter of this group saying they don't like it at all).
  • 40% of consumers were "extremely satisfied" by the overall telephone customer service provided by banks and financial services companies, followed by cell phone companies (29%), cable/satellite TV companies (28%) and credit card companies (26%).
  • By industry, the average waiting time to speak with a customer service representative was shortest for banks and financial services companies, at 1.28 minutes, and longest for tech support, at 2.12 minutes. Credit card companies recorded the second shortest wait time at 1.79 minutes, followed by cell phones companies (1.81), cable/satellite TV providers (1.89) and internet service providers (1.94).
  • 44% of consumers were "extremely satisfied" with banks and financial services companies when it came to resolving customer inquiries in a single phone call, followed by internet service providers (35%), cable/satellite TV companies and credit card companies (both 34%) and cell phone companies (33%). Technical support lines ranked lowest at 26%.

The definite linkage between customer service and customer loyalty (or indeed a lack of either) is also explored in depth in The Loyalty Guide Volume II, recently published by The Wise Marketer.

For additional information:
·  Visit Accenture at
·  Visit Discover at