Kerryn Boogaard Kerryn Boogaard
Beverly Goldsmith Beverly Goldsmith
Zoe Bingley-Pullin Zoe Bingley-Pullin

Not keeping the customer satisfied:

New research reveals that Australian companies deemed to have poor customer service are losing a staggering $8 billion a year.
By Motherpedia
Date: June 24 2014
Tags: business,
Editor Rating:

A survey of more than 2,000 Australian adults has 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. 55% 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 $807 before leaving, it is estimated that $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%) would never use that company again and the same number tell 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 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. Acknowledging this, one respondent commented, "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 with 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% 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 they would recommend the company to others. More than a third of people are prepared to spend more money with a company that gives good services. 

"With $8 billion of revenue being transferred between companies, this research reinforces just how much influence customers have on a business's success - it's surprising how many organisations still aren't getting it right," comments Jonathan Gale, CEO of NewVoiceMedia who conducted the research.

"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," Mr Gale said.

* * *

Simon & Garfunkel's hit 'Keep the Customer Satisfied' from 1970

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