Cost of Cutting Corners in Customer Service

Businesses are being warned of the real cost of cutting corners in customer service and of the importance of human contact, following new research by specialist outsourcer, Echo Managed Services.

The report quizzed 1,000 UK adults on their contact channel preferences with everyday service providers, as well as unearthing some of their biggest customer service frustrations.

53% of consumers said they prefer to deal with service providers either face-to-face or over the phone, increasing to 62% in more complex and emotive situations such as making a complaint or trying to correct a complicated problem.

The warning for those businesses looking to reduce customer service costs is that, by cutting the wrong corners, they risk a fall in customer satisfaction rates and ultimately a loss of business through deploying under-trained customer service advisors, or via an over reliance on technology not backed up by the option of expert human contact.

The research found that for the most popular form of contact, over the phone, 29% of consumers said they would move their custom elsewhere if they experienced poor customer service. 12% said they would be upset or angry, 8% wouldn’t recommend the company to others and 4% would actively discourage others in using that particular company.

The biggest customer service frustrations cited by customers were being kept waiting on hold (56%), automated call answering (17%), overseas call centres (7.5%) and inarticulate or poor quality staff (3%).

Warning businesses of the risks, Monica Mackintosh, customer services director at Echo Managed Services, said: “The research indicates the financial cost of getting customer service wrong as well as the wider impact on future reputation and success.

“Many companies are putting in place ‘arms-length systems’ such as web self-serve and automated call answering to both offer customers speed and convenience, and reduce operating costs. But our research findings highlight that despite the wide variety of channels open to customers, there is still a huge demand for customers wanting to talk to real, highly skilled and empowered human advisors.

“Whilst it’s important for businesses that regularly deal with customer enquiries to remain competitive, they need to find the right balance between cost saving and efficiency and ensuring they continue to provide exceptional customer experiences. Get it wrong, and customer losses will end up being more expensive in the long run.”

Despite the longing for human contact, digital channels do still of course have an important role to play and are being widely embraced by customers, particularly in more simple situations. For example, web self-service was the most popular method for paying a bill (35%) as was email for requesting information (27%). What’s important is that customers are directed to the best channel for their enquiry and according to their preference.

Monica added: “It’s clear from the research that a positive experience creates a wide range of strong emotional responses from customers. For example, despite customers’ gripes, when asked in what way they believe that good telephone service improves their experience as a customer; 22% said it increased trust and reassurance, 16% said it gave them a sense of loyalty, 10% felt valued and cared for and 7% felt less stressed.

“To alleviate risk, businesses must use human insight to complement the speed and convenience that technology can provide, but also understand when each contact channel is best used and when human contact is required.

“Self-service certainly has its advantages and, deployed in the right manner, this ‘always-on’ access to your organisation can increase customer satisfaction levels by making interactions quick and easy. But make sure you don’t leave your customers without a choice or feeling that it’s all about saving money – they must perceive it as a benefit to themselves. Competent and helpful contact centre advisors are still a vital part of any customer service strategy, helping customers when needed and giving those great experiences where technology cannot serve or is not desired to do so.”