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The AUD $11 billion customer service scared away

The AUD $11 billion customer service scared away

New research from NewVoiceMedia, a leading global provider of cloud technology, which helps businesses sell more, serve better and grow faster, reveals that companies in Australia are losing $11 billion a year due to poor customer service, a 38 percent and $3 billion increase since 2014. 

Since NewVoiceMedia’s initial 2014 survey, the number of Australian consumers who report leaving a business due to inadequate customer experiences has actually decreased from 58 percent to 48 percent, but consumers are now spending 49 percent more with a company over the course of a year before switching. 

Top reasons respondents gave for leaving were consistent with the previous study and included: feeling unappreciated (43 percent), unhelpful/rude staff (36 percent), not being able to get answers (29 percent), being passed around to multiple people (27 percent), being fed up of queuing (26 percent) and being kept on hold for too long (25 percent).

“With revenue being transferred between companies at an alarming rate, this research highlights the considerable impact that customers have on a business’s success”, said Jonathan Gale, CEO of NewVoiceMedia. “Customer experience is the key differentiator, and by doing it well, organisations can drive the customer acquisition, retention and efficiency that make leading companies successful”.

Calling out the contact centres

A majority of respondents (52 percent) indicated calling as their preferred method of communication with a business and 72 percent consider calls to be the quickest way of resolving an issue. However, consumers flagged being kept on hold as the top reason (54 percent) they dislike calling companies. Respondents also noted not being able to speak to a “real person” straight away (45 percent), having to repeat info to multiple agents (45 percent) and needing to navigate multiple menus (35 percent) as off-putting. On average, respondents indicated they would only hold for 11 minutes before hanging up. 

Consequently, only 40 percent suggested calls were the most effective way to resolve an issue. Email (25 percent) and social media (18 percent) were other channels respondents touted as “effective” in settling customer service issues.  

According to one respondent, a preference for non-telephone communications stems from email’s “ability to thoroughly document the problem and [lessen the] chance of a misunderstanding”. Others explained that social media often spurs response because the channel is public facing. 

How customers respond 

Faced with poor customer service, more than half (55 percent) of respondents would never use the offending company again, 47 percent indicated they’d change supplier, 36 percent would write to complain, 30 percent would tell friends and colleagues not to use the company, 15 percent would post an online review and 15 percent would complain publicly via social media. 

On the contrary, if provided with good service, respondents indicated they would be more loyal (70 percent), recommend the company to others (66 percent), use the company more frequently (41 percent) and spend more money (30 percent). Only 7 percent claimed good service would not affect their relationship.

Download Research Paper

Comments on the news

  • Shep Hyken, customer service and experience expert, New York Times and Wall Street Journal bestselling author, said, “There is a disconnect between how companies think they are doing and what customers are reporting. Customers are more service savvy than ever before, and companies are training customers to expect more tailored experiences. The companies that deliver great customer service have set the benchmark and with each improvement push the baseline bar higher. What was acceptable customer service last year is far below the bar this year”.  
  • Nancy Jamison, principal analyst at Frost & Sullivan, said, "Today's consumers want consistent, personalised and proactive customer service, not silo'd interactions. Change the journey and you change your win and retention rate”.
  • Blair Pleasant, president and principal analyst at COMMfusion LLC, said, “Social media can be a double edged sword – it can be an easy and efficient way for consumers to get customer care, but it can also become an open forum for discontentment”.
  • Jeff Toister, author, customer service expert, said, “Customers generally complain on social media because they weren’t able to resolve their issue somewhere else. They might have complained in-person, over the phone, or via email and were either dissatisfied with the response or they received no response at all. So, the best thing that companies can do to reduce or prevent complaints on social media is to strengthen the service they deliver via other channels".
  • Micah Solomon, author, speaker and customer experience consultant, said, "Through every demographic slice, good service is one of the clearest predictors of customer loyalty, willingness to recommend, and hesitancy to switch. And in our easy-to-switch reality, it is one of companies' most important weapons to achieve these all-important goals".
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