customer service statistics

An independent survey, commissioned by Broadbase Software, shows that while e-businesses are becoming more effective at providing a variety of options for returning goods, the timeliness of e-mail response continues to lag behind call center options. Moreover, the survey concludes, companies are missing critical cross-sell and up-sell opportunities by failing to turn customer queries into marketing opportunities.

E-mail response times continued to be a problem for many e-businesses, as nearly one-third took more than two business days to respond to inquiries, forcing customers needing faster response times to use more expensive options, such as dialing into a call center. "E-businesses need to remember that customer service is measured from the minute the customer logs onto the site through the entire purchasing/returning process," says David Milam, executive vice president of marketing at Broadbase Software.

The Henley Centre, a consumer consultancy in London, reports that the growth in customer complaints and an apparent decline in loyalty is not a reflection of consumer fickleness. Instead, it reflects consumers' desire for stability in their relationships. "On the whole people don't have the time or the energy to go around sacking their supermarket, their telecoms supplier, their gas provider or their bank. They want you to succeed." Henley Centre found that people today are living with uncertainty at the core of their lives -- "men who were uncertain about what it is to be a man nowadays; people in manufacturing jobs who were uncertain about their future job prospects; middle aged workers who were uncertain about their ability to change their job skills. For them any sort of change was a threat, not an enjoyable game." Deliver solid service, demonstrate concern, keep promises. Long-term relationships will result.

According to a study released in mid December by research firm Datamonitor, e-retailers were expected to spend a record $460 million on e-service solutions this year. Despite this level of investment, online consumers are still likely to abandon their shopping carts because of poor customer service, the study notes. The main reason, Datamonitor says, is a savvier consumer with higher expectations. "Online customer service will have a significant impact on the way consumers make purchase decisions this holiday season," says Glenn Koser, an analyst at Datamonitor.

E-mail response continues to drive the greatest portion of customer dissatisfaction. Customers are more likely to be satisfied with sites that have direct interactive communication capabilities or provide phone numbers specifically dedicated to resolving service issues. Shoppers expect immediate response to their inquiries, but e-mail response time remains dramatically inefficient, sometimes taking days.

Although this has improved over the past year, the demand for online satisfaction has become so overwhelming that many companies cannot keep up. "People want their Web shopping experience to simulate the live shopping experience as closely as possible," says Koser.

Frustrated Consumers Have Little Tolerance For Poor Customer Service

More than 60 percent of consumers polled by Mobius Management Systems, Inc., a company whose software supports customer service operations, said they had cancelled accounts with their banks, citing frustration due to poor customer service. Consumers said they would rather switch banks than argue about a matter they felt was not appropriately responded to by the bank's customer service department.

The poll of 300 consumers who are responsible for household purchasing found that in addition to changing banks, customers were also leaving other service providers due to poor customer service: 36 percent had changed insurance providers, 40 percent had changed telephone companies, 35 percent had changed credit card providers and 37 percent had changed Internet service providers.

"Customer service is no longer judged by how many ways a customer can reach a company; it's about creating an individual customer experience that responds to queries and problems at the first moment of customer-to-company contact. It can mean the difference between keeping a customer for life, or losing one in an instant," said Mitchell Gross, Mobius president and CEO

The Mobius poll also revealed what types of personal interaction customers liked and disliked about their customer service contact experiences: 80 percent of consumers prefer speaking with a live customer service representative to an automated system; 94 percent of consumers wanted to be transferred to another customer service representative no more than once; 80 percent of consumers preferred to speak with a customer service representative on weekends; and 84 percent of consumers are frustrated when the customer service representative does not have immediate access to their account information for the current billing period.

The report also estimates that 37% of on-line consumers rely on customer service more from web retailers than they do from the traditional stores because on-line service is easier and results in quicker response times. According to Forrester, 90% of respondents said they considered service to be critical to their decisions about where the shopped on-line. Forrester asked 17,000 individuals from Greenfield Online's marketing research panel about online customer service issues.

Progressive companies understand inbound customer service calls as opportunities to build relationships. Agents find out what callers want, correct problems and pass any information up the line to other departments to get issues resolved. If callers are interested, such calls also allow agents to offer and sell them products and services. Outbound telemarketing is giving way to outbound customer care, where companies solicit feedback from customers, and, where appropriate, offer better deals or services to them.

A recent market analysts' study found that around 66% of online transactions are abandoned before a sale is closed.... Web shopping that fails to integrate some element of customer service becomes equivalent to window shopping -- which does not present a very lucrative business model.

Customer satisfaction, research suggests, is a key determinant of consumer loyalty, and satisfied customers typically feel the return on their investment worthwhile. Every year, however, more than half of the average brand's loyal customers will shift to another company for a similar product.

Therefore, customer satisfaction, in conjunction with customer retention, becomes a vital component of every business' success.

Current Harvard Business School research by Narakesari Narayandas suggests a link between customer satisfaction and customer loyalty. That link, however, isn't always as strong as executives might think. In fact, Narayandas' research suggests customers must be more than satisfied to remain loyal. They must be "delighted." Delighted customers, Narayandas says, exhibit strong ties to companies and brands and repurchase products from favored companies more often than customers who are simply satisfied.

Additionally, delighted customers are 'advocates' of their vendors' products, moving other people to purchase from vendors and companies of which they approve. The same research suggests delighted customers will even pay more for services from their favorite firms.

UNDERSTANDING CUSTOMERS IS KEY TO RETENTION
The importance of keeping the customers you have is well documented. The cost of regaining a lost customer has been calculated at 12 times the cost of acquiring that customer in the first place, and more than 90% of dissatisfied customers don't come back regardless of the effort you make.

Worse, a dissatisfied customer will tell many more people of his or her bad experience than a satisfied customer will tell of a positive experience. It takes three to five satisfied customers to reach the same number of people as one displeased customer. Tracking and analyzing customer information is critical to satisfying customers. Here are some questions you can ask yourself to be sure you understand your customers;
* Who are my best customers?
* How much revenue and profit do they provide my business?
* How do spending patterns differ across my customer segments?
* How many customers are moving from a low-profit segment to a higher-profit segment? Why?
* How many customers have "defected"? Why?
* Have I analyzed opportunities to cross-sell and up-sell within my business?


reading and links
	customer service / customer satisfaction

		statistics, facts, and quotes
		Customer Care Institute Research Center Phone Calls Are Better Than E-Mails For Returning Goods An independent survey, commissioned by Broadbase Software, shows that while e-businesses are becoming more effective at providing a variety of options for returning goods, the timeliness of e-mail response continues to lag behind call center options. Moreover, the survey concludes, companies are missing critical cross-sell and up-sell opportunities by failing to turn customer queries into marketing opportunities. E-mail response times continued to be a problem for many e-businesses, as nearly one-third took more than two business days to respond to inquiries, forcing customers needing faster response times to use more expensive options, such as dialing into a call center. "E-businesses need to remember that customer service is measured from the minute the customer logs onto the site through the entire purchasing/returning process," says David Milam, executive vice president of marketing at Broadbase Software. CC News April 2001 Customers Want You to Succeed The Henley Centre, a consumer consultancy in London, reports that the growth in customer complaints and an apparent decline in loyalty is not a reflection of consumer fickleness. Instead, it reflects consumers' desire for stability in their relationships. "On the whole people don't have the time or the energy to go around sacking their supermarket, their telecoms supplier, their gas provider or their bank. They want you to succeed." Henley Centre found that people today are living with uncertainty at the core of their lives -- "men who were uncertain about what it is to be a man nowadays; people in manufacturing jobs who were uncertain about their future job prospects; middle aged workers who were uncertain about their ability to change their job skills. For them any sort of change was a threat, not an enjoyable game." Deliver solid service, demonstrate concern, keep promises. Long-term relationships will result. The Henley Centre February 2001 The High Price Of Bad Customer Service According to a study released in mid December by research firm Datamonitor, e-retailers were expected to spend a record $460 million on e-service solutions this year. Despite this level of investment, online consumers are still likely to abandon their shopping carts because of poor customer service, the study notes. The main reason, Datamonitor says, is a savvier consumer with higher expectations. "Online customer service will have a significant impact on the way consumers make purchase decisions this holiday season," says Glenn Koser, an analyst at Datamonitor. E-mail response continues to drive the greatest portion of customer dissatisfaction. Customers are more likely to be satisfied with sites that have direct interactive communication capabilities or provide phone numbers specifically dedicated to resolving service issues. Shoppers expect immediate response to their inquiries, but e-mail response time remains dramatically inefficient, sometimes taking days. Although this has improved over the past year, the demand for online satisfaction has become so overwhelming that many companies cannot keep up. "People want their Web shopping experience to simulate the live shopping experience as closely as possible," says Koser. CCNews January 2001 Frustrated Consumers Have Little Tolerance For Poor Customer Service More than 60 percent of consumers polled by Mobius Management Systems, Inc., a company whose software supports customer service operations, said they had cancelled accounts with their banks, citing frustration due to poor customer service. Consumers said they would rather switch banks than argue about a matter they felt was not appropriately responded to by the bank's customer service department. The poll of 300 consumers who are responsible for household purchasing found that in addition to changing banks, customers were also leaving other service providers due to poor customer service: 36 percent had changed insurance providers, 40 percent had changed telephone companies, 35 percent had changed credit card providers and 37 percent had changed Internet service providers. "Customer service is no longer judged by how many ways a customer can reach a company; it's about creating an individual customer experience that responds to queries and problems at the first moment of customer-to-company contact. It can mean the difference between keeping a customer for life, or losing one in an instant," said Mitchell Gross, Mobius president and CEO The Mobius poll also revealed what types of personal interaction customers liked and disliked about their customer service contact experiences: 80 percent of consumers prefer speaking with a live customer service representative to an automated system; 94 percent of consumers wanted to be transferred to another customer service representative no more than once; 80 percent of consumers preferred to speak with a customer service representative on weekends; and 84 percent of consumers are frustrated when the customer service representative does not have immediate access to their account information for the current billing period. CCNews October 2000 The influence of word of mouth continues to increase. Yankelovich Monitor reports that 33% of consumers agree with the statement "I usually buy the same brands that my friends use," up 12 points since 1994. Top sources of information on new product purchases are friends, current product owners and family members. Business Thinkers Businessthinkers.com 01 May, 2000 The Growth of Alternative Customer Contact Channels We use predictive analysis to understand the growth of alternative customer contact channels, and project the following mix by the year2003: 35% by Web self-service, 30% by telephone, 25% by e-mail and 10% by all others. We do not think the number of inbound telephone calls will stop growing. Instead, we think the total number of contacts with companies will increase along with the changing distribution of these contacts. Americans demand easy access to the companies with whom they do business. In fact, accessibility to mission-critical information is already a recognized feature used to differentiate companies. Dr. Jon Anton www.e-Interactions.com Call Center Magazine, April 2000 Customer experience is the next competitive advantage for organizations in the 21st century. Companies can no longer compete based merely on price or products. Instead, truly differentiated customer experiences will separate successful from unsuccessful organizations. Today's more sophisticated customers are demanding personalized products and delivery methods. Unfortunately, businesses typically explore how they can maintain a minimum acceptable service level rather than how to employ service levels as a strategic advantage. Barry Goldberg, Alltel’s Managing Director of Customer Management Solutions CRM Supplement, Call Center Magazine, March 2000 Customer Service Is Essential On The Web A new report from Forrester Research, Driving Sales with Service, estimates that 37% of all on-line buyers (4.8 million shoppers) have requested customer service on line. The report says that on-line shoppers prefer e-mail to the phone. The report also estimates that 37% of on-line consumers rely on customer service more from web retailers than they do from the traditional stores because on-line service is easier and results in quicker response times. According to Forrester, 90% of respondents said they considered service to be critical to their decisions about where the shopped on-line. Forrester asked 17,000 individuals from Greenfield Online's marketing research panel about online customer service issues. Forrester Research, www.forrester.com Call Center Magazine, March 2000 On-line Customer Service Customers are discovering that although the on-line companies they buy from have the goods, services and marketing to draw them in, they ultimately fall short on customer service. Customer Relationship Management Software Adam Throne Call Center Magazine, March 2000 The Old Pattern Is Shifting Cold calls from telemarketers appear to be on the way out. Instead, companies are now subscribing to the one-to-one customer relationship management (CRM) philosophy and are getting to know their customers better. Progressive companies understand inbound customer service calls as opportunities to build relationships. Agents find out what callers want, correct problems and pass any information up the line to other departments to get issues resolved. If callers are interested, such calls also allow agents to offer and sell them products and services. Outbound telemarketing is giving way to outbound customer care, where companies solicit feedback from customers, and, where appropriate, offer better deals or services to them. Customer Relationship Outsourcing Brendan B. Read Call Center Magazine, March 2000 A recent market analysts' study found that around 66% of online transactions are abandoned before a sale is closed.... Web shopping that fails to integrate some element of customer service becomes equivalent to window shopping -- which does not present a very lucrative business model. The Customer Always Clicks Twice Bill Michael Computer Telephone, November 1999 Traditional CRM implementations have a failure rate of 65 percent, according to one Gartner Group Study. CRM by Karen Mitchell Sales & Field Force Automation, September 1999 KEEPING A LOCK ON CUSTOMERS Nearly 10% of company revenue is lost due to customer mismanagement, according to the report, Put a Lock on Customer Loyalty, by Hepworth + Company. The report is a result of responses from more than 60,000 Canadian consumers and business-to-business customers over a five-year period. Research found that a third of dissatisfied customers do not complain, and the ones that do complain tend to be a company's most loyal customers. These customers are more likely to remain customers, provided their problems and questions are dealt with and resolved. The study also found that unhappy customers usually share their negative feelings with an average of three people. So, if a company has a million customers and 50% of them experience a problem, 1.5 million people will hear negative comments about the company. Hepworth + Company has coined the resulting potential for loss of revenue as “leaky bucket syndrome,” pointing out that the best strategy for a company is to try to keep the customers they already have while providing a forum where customers can easily give their feedback. The company offers seminars to help organizations find out more about their revenue at risk and customer risk management. Hepworth + Company, 888-975-7777 Call Center Magazine, December, 1998 THE CUSTOMER SATISFACTION CYCLE People want to feel important, particularly if they are making purchasing decisions. Regardless of net worth, economic conditions and annual income, how consumers spend their money is based, in large part, on where they feel they receive the most for their dollar. Customer satisfaction, research suggests, is a key determinant of consumer loyalty, and satisfied customers typically feel the return on their investment worthwhile. Every year, however, more than half of the average brand's loyal customers will shift to another company for a similar product. Therefore, customer satisfaction, in conjunction with customer retention, becomes a vital component of every business' success. Current Harvard Business School research by Narakesari Narayandas suggests a link between customer satisfaction and customer loyalty. That link, however, isn't always as strong as executives might think. In fact, Narayandas' research suggests customers must be more than satisfied to remain loyal. They must be "delighted." Delighted customers, Narayandas says, exhibit strong ties to companies and brands and repurchase products from favored companies more often than customers who are simply satisfied. Additionally, delighted customers are 'advocates' of their vendors' products, moving other people to purchase from vendors and companies of which they approve. The same research suggests delighted customers will even pay more for services from their favorite firms. Real-Time Call Record Delivery Via The Internet by Rich Nelson, Call Interactive Call Center Solutions, November 1998 Customers Don't Forget As background for the book "Customer Service Nightmares," customers were invited to submit their "terrible tales of customer service." Lots of people quoted the extended time elapsed since the experience. For instance, "This happened three years ago." or "Let me tell you what happened five years ago." One woman recounted a dealing with a local bank from 20 years ago -- a bank that was absorbed by a bigger bank and no longer exists! But she's still angry from that long ago! If businesses are counting on customers to forget rudeness or ineptitude, don’t bank on it. The Telephone "Doctor" Friendly Voice, 800-882-9911 Call Center Magazine August, 1998 COMPARISON OF WOMEN AND MEN BUSINESS OWNERS There are significant differences between women and men business owners on the relative importance of factors influencing their purchasing decisions. Seventy- two percent (72%) of women business owners compared to 51% of men business owners report that a 24-hour or toll-free help line is very or extremely important; 77% of women business owners compared to 58% of men business owners report that vendor knowledge/experience is very or extremely important; 74% of women business owners compared to 56% of men business owners report that post-sale technical support is very or extremely important. from Embracing the Information Age: A Comparison of Women and Men Business Owners, National Foundation of Women Business Owners, 1997 WHY THEY DON'T COMPLAIN Most customers don't complain, even if they're unhappy with your company. People hide their feelings from financial services companies and food and beverage companies the most. Here's why they won't tell you their problems: Customers believe complaining will do no good because no one cares. They feel it's not worth the time or trouble. They don't know where or how to complain. They fear hostility and retribution. Hepworth + Company Ltd., 888-975-7777 Call Center Magazine, December 1997 SERVICE PAYS Companies that place a high emphasis on customer service see 12 times the return on sales than those companies with a low emphasis on service. According to one study, 70% of customers left because of a lack of attention from front-line employees. A major trend in sales compensation is building customer satisfaction into pay plans. 68% of customers stop doing business with a company because of poor service. Yet 95% of dissatisfied customers would do business again with a company if their problem was solved quickly and satisfactorily. International Customer Service Association, 800-360-1CSA / 312-321-6800 Call Center Magazine, December 1997 UNDERSTANDING CUSTOMERS IS KEY TO RETENTION The importance of keeping the customers you have is well documented. The cost of regaining a lost customer has been calculated at 12 times the cost of acquiring that customer in the first place, and more than 90% of dissatisfied customers don't come back regardless of the effort you make. Worse, a dissatisfied customer will tell many more people of his or her bad experience than a satisfied customer will tell of a positive experience. It takes three to five satisfied customers to reach the same number of people as one displeased customer. Tracking and analyzing customer information is critical to satisfying customers. Here are some questions you can ask yourself to be sure you understand your customers; * Who are my best customers? * How much revenue and profit do they provide my business? * How do spending patterns differ across my customer segments? * How many customers are moving from a low-profit segment to a higher-profit segment? Why? * How many customers have "defected"? Why? * Have I analyzed opportunities to cross-sell and up-sell within my business? Coopers & Lybrand Customer Focus, 416-869-1130 Call Center Magazine, October 1997