Customer services and why people switch brands
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UK consumers are unimpressed by brands’ customer service in digital channels leading 53 per cent to switch brands in at least one industry.
Brands are failing to provide adequate customer service through digital channels, frustrating their desire to move away from costly call centres, according to new research by Accenture’s Global Consumer Pulse.
The study, seen exclusively by Marketing Week , finds that when asked whether brands successfully marry up digital and traditional modes of customer support, people in the UK are less enthusiastic than any of the 32 countries surveyed except one. Only 4 per cent in the UK strongly agree that companies do this well; Japan is bottom with 2 per cent.
These findings are almost certainly a result of elevated expectations, given that consumers show less satisfaction in mature markets than emerging markets. However, it does suggest that UK consumers believe the majority of brands lag far behind the best providers in terms of the service they provide across channels.
Accenture managing director Rachel Barton says that because of this, businesses are unable to realise their ambitions to create “channel shift”, where consumers opt to use the internet instead of the telephone to interact with brands. “Although the penetration of online channels is very high, the phone channel has not dwindled,” she says.
Potential customers now gather information about a brand much more via digital channels than traditional media such as TV and press ads and even in-store information, according to the research. Consumers say they often use expert online reviews, corporate websites and online customer comments, although word of mouth beats them all. In total, 85 per cent of people in the UK use at least one digital medium to find information about products and services.
But customers feel less able to rely on digital channels for service and support – 81 per cent still use the phone to get in touch. Barton says consumers remain unconvinced that their problems will be resolved through digital channels alone, even though brands’ shift to digital “was supposed to appeal to customer demographics and changing consumer behaviour”.
She adds: “If digital were truly able to allow customers to execute an end-to-end task, I wouldn’t expect to see phone use quite so high.”
There is a clear opportunity for brands to provide a digital alternative to call centres because even though consumers are likely to use the phone first, only 45 per cent say they are satisfied when they do. Company websites are performing even worse at meeting people’s needs – 43 per cent have used this route for customer service and less than one-fifth were satisfied.
Barton argues that customer service is plagued by the same ‘pain points’ it always has been, such as the inability to access information in a convenient way. “Those pain points are manifesting themselves in other channels” says Barton. “Thirty-one per cent are frustrated with a lack of mobile functionality. Our view is that every customer is a digital customer and mobile has to be a part of every organisation’s proposition.”
The best digital hope may lie in online text chat, which nearly a third of consumers have tried and 60 per cent are satisfied with. Whether brands can make cost savings from this is not yet certain, since it still requires service staff in the same way that call centres do.
Whatever the channel, the implications of failing to meet customers’ service expectations are huge. Accenture estimates that the UK’s ‘switching economy’ – comprising the revenue from consumers who leave one brand for another each year – is worth £116bn, or 12 per cent of UK consumers’ annual disposable income.
This is partly a result of organisations “playing a relatively defensive game that is about customer acquisition”, suggests Barton. She claims that marketers see bringing in a new customer as a more exciting proposition than retaining one. Accordingly, 36 per cent of consumers rate their loyalty towards brands as 1 to 3 on a 10-point scale, with only 16 per cent rating it from 8 to 10.
When it comes to attracting new customers, being easy to do business is the top factor for brands in satisfying people, which is the same as last year’s Accenture study . For existing customers there is an obvious wish for human contact. In-store and home visits are the service channels that result in highest approval, while three of the top four customer service priorities for consumers are related to the qualities possessed by staff. Most important is that staff be knowledgeable, but they also need to be polite and capable of resolving problems by themselves.
Of these three measures, politeness is the only one where the majority of UK consumers are satisfied; just 45 per cent are happy with the level of staff knowledge and 35 per cent with their ability to help without having to refer problems to colleagues.
Nationwide head of digital banking and self-service Paul Cooper says that customer service needs to be a matter of choice, so that people can go to the channel that is right for them (see Marketers’ Response below ), which sometimes means a face-to-face conversation is imperative. “Increasingly, where we see the role of the branch to be for those people who are new to a product or making a first-time purchase. If you’re opening your first current account or applying for your first mortgage, we see there is value in customers sitting down and talking to somebody – and so do customers.”
At Ovo Energy , marketing director Charlie Smith agrees that a brand should not “discriminate” between channels and that service needs to be impeccable across any channel a customer wants to use. That said, Ovo is explicitly motivating people to interact with it digitally. “If you decide you want to manage your account online with us, you get £60 off your bill, because we make savings and we pass those savings on to the customer,” he explains.
While mass market brands, such as those in the financial services and energy sectors, need to be able to anticipate the wishes of all kinds of consumers, Accenture’s Barton notes that it may be better for brands with a narrower market to focus on providing high levels of service in fewer channels.
“It is important to offer a channel or a set of channels that appeal to the customer segment you are serving, selling to and marketing to as an organisation,” she says.
If brands start from there, they are likely to be better placed to shift the current unimpressive figures for brand loyalty in their favour, which means a better chance too of holding on to their chunk of today’s £116bn switching economy.
Consumers who are switching energy providers right now are doing so mainly because of price. However, if we can stimulate some of the latent market demand for switching, there will be an increasing amount of people thinking beyond price. Probably most people don’t want to have to pick up their phone and speak to an energy company, but I know that if I do, I want to feel I’m speaking to a person who will listen to me and solve my problems as quickly as possible. There are times when people still want to call their energy company but an increasing number of our customers are happy to deal with us solely online. We spent a lot of time and money investing in our digital channels, so we hope we’re getting to a point where people don’t have to call us.
Head of online banking and self-service
We’re seeing more switching across all finance sectors and particularly people using digital to compare and contrast, both in terms of features and service. Our research shows ‘empty nesters’ and retirees are the groups that are not embracing digital, but tablets tablets are starting to become more attractive to them. I think digital has, in the past 18 months, become mass-market. Nationwide sees service differentiation as being key across all channels – we take satisfaction seriously across all of them. We’re trying to make it a matter of choice, so the customer goes to the channel that’s most convenient for them. Increasingly where we see the role of the branch is if people are new to a product or making a first-time purchase.
Accenture surveyed 12,867 consumers in 32 countries online in July 2013, including 1,034 in the UK. The results were released to Marketing Week this week. Each respondent was asked to evaluate up to four out of 10 industry sectors, resulting in 3,537 cumulative UK responses across all the industries. All respondents were purchase decision makers in at least one of the industries.
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