Customer Service Is Crucial in a Downturn

In this time of economic turmoil, when companies are fighting to hold onto every bit of business they can, nobody can afford to lose customers by providing substandard service and support. Yet like the economy itself these days, business-to-business customer support is plagued by disloyalty and disconnects. To fix this dysfunctional situation and to achieve high performance, companies have to sharpen their focus on improving the customer experience.

Consider the situation in the global electronics and communications businesses, both equipment and services. Last year around the world an astonishing 30% of companies switched vendors due to poor customer service, costing the companies they ditched, on average, $15 million each in lost business.

What's more, many high-tech companies manage their support offerings so poorly that they don't even know which services customers have purchased and which are meant to be offered for free. The result: Some 28% of the customer support they gave away last year should have been paid for by the recipients.

A vivid illustration of this disconnect between buyers and suppliers is that most businesses rate their own service more highly than their customers do. Worse, they underperform in delivering the support services their customers value the most. All too often, the outcome is lost business.

These troublesome findings surfaced in a recently completed Accenture (ACN) research project that consisted of two simultaneous online global surveys—one examining providers of customer service and the other querying the recipients of those services. In all, roughly 900 executives were surveyed from 12 countries: Argentina, Brazil, Britain, Canada, China, France, Germany, Italy, India, Japan, Mexico, and the U.S. Regional evaluations were also made for Latin America, North America, Europe, and Asia.

REGIONAL DIFFERENCES

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—whether the service is superior or inferior.

The Chinese have the highest switching rate (55%) due to poor customer service; Argentinians have the lowest (7%). The U.S. ranked seventh, at 22%. Meanwhile, Latin Americans lag in customer service technology and training compared with the other three regions.

More French have considered switching (44%) than the other European countries surveyed. In training and technology Britain lags far behind the other European countries queried. Indians have highly inflated evaluations of the quality of customer service they provide compared with how well their customers evaluate them. And the Japanese are the toughest self-critics of the quality of their customer service.

Delving deeper into regional findings, several intriguing contrasts materialized. Some 36% of Asians have switched business customer-service providers in the past year due to poor customer service, more than Europeans (26%), North Americans (21%), and Latin Americans (18%). 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 training new support technicians to be able to deliver high-quality service and support has been a significant challenge. This turned out to be especially true for providers from Latin America (92%) but less so with North America (61%), Europe, and Asian (49% each). Why? For many years Latin America has had a noncompetitive business environment in the technology industry, especially within telecommunications. As a result, investments in training, processes, and workforce weren't top priorities.

OBSTACLES TO BETTER SERVICE

When providers from all four regions were asked why it's hard to deliver superior service, the three reasons cited most often were their lack of supporting technology (selected by 30% of respondents), a dearth of trained resources (29%), and nonexistent definitions of support processes (22%).

A superior experience with a provider encourages loyalty for two-thirds of recipients. Such an experience had a stronger impact in North America than elsewhere. Among North Americans, 78% indicated that a superior experience increases their customer loyalty, exceeding Latin Americans (67%), Asians (61%), and Europeans (55%).

Despite these problems and contrasts, respondents from all four regions shared the view that two important factors create a superior and differentiated customer service experience. First, the quality/competence of service personnel (56% average); and, second, the ability to address the problem on the first call or e-mail (51% average).

France is a particularly tough place to provide and receive customer service. When asked whether they have considered switching providers during the past year due to poor service, French respondents ranked highest among European countries, at 44%, and second worldwide after China (52%). The French also were among the toughest critics of their service providers: Some 42% rated their overall satisfaction with the service and support they received as "extremely low," double the rate of any other European country surveyed.

India is challenged by a different problem: Providers of service and support there overestimated many aspects of their service and support delivery relative to how customers felt about it—much more so than the other surveyed countries. Nearly 88% of providers think they have retained their customers through superior customer service and support. But 44% of their customers indicated they had switched providers in the past year due to poor customer service. This high level of dissatisfaction often occurs in emerging markets such as India—and is even more pronounced there because many citizens there have been exposed to high service levels in other countries.

Japanese providers revealed themselves to be the most brutal 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% 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.

SOME SOLUTIONS

What should be done about all these problems? Here are a few ideas:

• Improve first-call or first e-mail problem resolution;

• Enhance customer service portal content;

• Invest more in training and developing customer service agents;

• Bolster knowledge of each provider's installed base;

• Boost the overall customer experience using self-service; and

• Implement analytical and diagnostic tools.

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 for high performance when the market turns around.

Brian Sprague is a senior executive with the Accenture Communications and High Tech industry group. Article reprinted with permission from Accenture.