Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
A number of service-based industries have not progressed beyond the fundamentals of customer service at a time when consumer expectations are reaching new heights, a new report found.
The report, released by software company, Pegasystems, also raised red flags against the perceived gap between how well businesses think they perform, versus what their customers actually experience.
According to the findings, while 82 per cent of service businesses believe they know their customers well, only one-quarter of banking and one-fifth of broadband consumers feel the same. This is despite 96 per cent of organisations agreeing customer experience is a critical or important differentiator, raising questions as to why they are not achieving the intimacy required to anticipate customer needs and personalise the customer journey.
In addition, 83 percent of decision makers admitted their customer service initiatives over the last two years have primarily focused on ‘getting the basics right’ even as consumers now demand more advanced, personalised experiences, the report found.
“What’s really interesting is a lot of business think they know their customers really well, but in actual fact the customers don’t feel the same way,” Pegasystems A/NZ managing director, Scott Leader, said.
Customers think businesses are not listening
Despite the fact that businesses self-rank listening to customers as their top customer service attribute, the survey showed one of the primary experience problems cited by customers is businesses failing to listen to their needs.
“Customers are still feeling like they’re getting products pushed at them,” Leader said. “That’s regardless of what their discussion point is or what they’re looking to do within an organisation.”
Consumers also cited difficulty getting a quick path to assistance and, organisations delivering the bare minimum service, as their top customer service issues. And while 66 per cent of businesses believe their service representatives quickly respond to customers every time, 66 per cent of banking and 77 per cent broadband customers disagree.
“From a customer experience standpoint, when people interact with businesses, whether it’s their call centre or on the Web, mobile or traditional bricks-and-mortar experience, they are expecting the same level of service and having that seamless experience,” Leader explained. “That is certainly an area where businesses are investing in now, to drive that enhanced customer experience.
Who is responsible for the customer experience?
Interestingly, the majority of Australian businesses surveyed believe the CEO is responsible for the customer experience. It serves as a warning that executives should not be too complacent when it comes to being accountable from the top down.
“What we found surprising was that 70 per cent said they thought the CEO should lead the customer experience and only 10 per cent said it should be the CFO, which is not the area they have traditionally focused on,” Leader said.
“Only 5 per cent thought it should be the chief customer service officer, and that’s because it is a relatively new role in Australia, although it has been around for quite some time in the US. But it’s certainly shaking up an area that Australian companies are investing in. Meanwhile, only 8 per cent thought it was the CMO’s responsibility.”
Comparatively, Leader believed countries like the United States are ahead in terms of service businesses.
“But you can see even with the recent recruitment, that things are starting to change in Australia,” he said. “Around the mid-year mark, Westpac recruited former Walt Disney executive, Tom Boyle, as chief customer officer. Westpac saw an opportunity there to bring a new chief customer officer to really drive the business forward. So I do think there are Australian businesses looking to the US and leveraging their talent to drive their business and brand.”
Omni-channel integrators are in the minority
Only 10 per cent of service businesses have been working on developing omni-channel integration capabilities over the past two years, the report found, underscoring the point that most organisations are focused on mastering the basics at the expense of services that can help them better engage with customers in the future.
Businesses also underestimate the threat from new, innovative providers as 80 per cent believe the biggest competition still remains with traditional providers within their existing market. Yet both banking (26 per cent) and broadband (33 per cent) customers have indicated they would consider switching to a new, innovative company over traditional organisations.
Despite a wide majority of businesses surveyed understanding the importance of customer service to their brand, most are still focused on the basics while new innovative business models are gaining the attention of their customer base, the report found.
“From a business standpoint, when customers are viewed, it’s only in a one- or two-dimensional way, so knowing their future needs is something that is really the holy grail for all marketers,” Leader said. “On top of this, consumers are becoming a lot more demanding in terms of their customer experience and how well the businesses know them. I really think that’d where the disconnect lies.”
The leaders and the stragglers
Australian consumers ranked rank restaurants, hotels and bricks-and-mortar retail outlets as having the best customer service, while the poorest performers were the telecom, legal services and utilities industries.
Consumers also ranked traditional retail shops ranked third compared to ecommerce sites (3 per cent), which fell to the bottom of the list. This supports conclusions about shoppers’ preferences for face-to-face customer service over digital interaction.
“At the moment with ecommerce, it seems like a very one-dimensional transaction that people are experiencing online, where they basically click and buy and that’s it,” he said. “The businesses that we’ve seen do it right are investing in a far richer experience online.”
Leader agreed the challenge is to replicate personalised experience in the traditional bricks-and-mortar shop to the digital space.
“One area we’re seeing a lot of investment in is ‘co-browsing’, so scenarios where customers are interacting with a business on their website and you can have a virtual chat with a customer service rep who can potentially take over and help you along with the experience of transaction,” he explained.