Bad service loses Australian businesses a fortune

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By: Wise Marketer Staff |

Posted on July 4, 2014

Australian companies that are deemed by customers to offer poor customer service are losing a worrying Aus$8 billion each year, according to a study by cloud-based contact centre vendor NewVoiceMedia.

The survey of 2,004 adults from Australia revealed that 58% are taking their business elsewhere as a result of inadequate customer service - and of those, 92% have switched at least once or twice in the last year.

Some 55% of customers said they are so put off from calling a business for fear of being kept on hold that they will switch to a competitor without even attempting to resolve a problem.

Top frustrations causing consumers to switch are lack of appreciation from a business (46%), unhelpful/rude contact centre staff (38%) and being passed around multiple agents (32%).

With respondents spending an average of Aus$807 before leaving, it is estimated that Aus$8 billion is lost by businesses in Australia each year, not including the significant cost of replacing lost customers and the impact of negative word of mouth.

Faced with a poor experience, more than half of customers (58%) said they would never use that company again and 58% would tell their friends and colleagues not to use the business.

As further evidence that complaints can't be kept quiet in the digital age, 16% of consumers admit they would take their revenge online by posting a review or complaining via social media. Among the 16-34 year-olds, this figure soared to 53%.

The research indicated that 16-24 year-olds are the most tolerant when it comes to bad interactions, with 8% taking no action at all following a poor experience, compared with only 2% of 35-44 year-olds. But those that do are the most likely to turn to social media - arguably the most detrimental means of complaint. As one survey respondent said, "One hashtag and the entire world can see it."

Both genders remain fairly tolerant of hold times, but women more so than men - with 85% prepared to wait for more than five minutes, compared to 77% of men. Even so, women object more than men to being kept on hold.

Voice is still the channel of choice for customers, with 59% preferring to contact a business by phone and 32% choosing to address an issue via email. While the majority of those surveyed prefer such traditional forms of communication, 27% of Generation Y chose social media as the most effective way to get a response - five times that of the over 55s.

The significance consumers place on excellent service presents opportunities as well as threats, as organisations can boost their business by getting it right. The research found that 77% of respondents said that good service had a considerable influence on their loyalty and 76% would recommend the company to others. Half (51%) would use the business more frequently and 35% are prepared to spend more money with them.

"With so much revenue being transferred between competitors, this reinforces just how much influence customers have on a business's success - so it's surprising how many organisations still aren't getting it right," concluded Jonathan Gale, CEO for NewVoiceMedia. "Great customer service is the critical differentiator and investing in providing personalised and engaging customer experiences will help businesses succeed in retaining customers and securing new business."

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