Keith Pearce (pictured – senior marketing director, Genesys EMEA) asks the billion dollar question – how can businesses around the world improve their relationships with customers?

Poor customer service is costing companies around the world billions each year. According to a survey by Genesys and Datamonitor/Ovum, the figure stands at a staggering US$338.5 billion.

So just where are businesses falling short and why are there such high levels of customer churn?

Today’s customers don’t just want to be satisfied: a ‘satisfied’ customer will still leave a business if something better comes along – in almost 90 per cent of cases. Customer loyalty is a far stronger emotional engagement than simply creating satisfaction. In order to achieve this kind of relationship, organisations – no matter where in the world – need to create a strong customer experience.

Abandoned relationships

Enterprises are losing hundreds of billions of revenue each year due to defections and abandoned purchases as a direct result of a poor experience. Nearly 70 per cent of consumers surveyed by Genesys and Datamonitor/Ovum said they had ended a relationship due to poor customer service alone.

Not surprisingly, customer service levels vary enormously across the world and across industries. What is surprising is that the losses companies suffer due to poor customer service are not always proportionate to the size of the economy they operate in. The report – The Economic Impact of the Customer Experience and Engagement in 16 Key Economies* – finds that the US suffered the worst losses at more than $90 billion in 2009.  China, Brazil and Mexico came second third and fourth in the table respectively, above most European countries, highlighting the severity of the situation in countries like Mexico, which is losing in excess of $30 billion.

In a comparative look at customer service between different countries, consumers who are most likely to terminate a business relationship are from Brazil, Poland, China and India – all of these countries have been highlighted as having low efficiency of operations for customer service.

On the other hand, countries like Australia, New Zealand, the UK and the US have high efficiency of operations, but are also at high risk of customers abandoning relationships. This shows that here, businesses might be efficient at handling interactions, but are still falling short where consumer satisfaction is concerned.

Retaining customers, especially profitable ones, is far more cost effective than attracting new ones – particularly in countries like the UK and Australia, where each lost customer relationship was valued above all other countries at $396 and $339 respectively.

Regional differences

Another regional difference is that, on average, consumers in Poland, China and Mexico have far more interactions with companies compared to Australia, France, New Zealand and the US. So, organisations in the latter areas have less chance to interact with their consumers and have to work even harder to make each interaction count. Nevertheless, the survey has found that the lower the number of consumer interactions per year, the more efficient customer service organisations are in completing consumer interactions. This suggests that organisations still need to find a medium between reducing customer risk and increasing efficiency.

What customers want

The environment is changing rapidly, both in methods of contact and customer expectation. Customers want more from businesses – it is not enough for businesses to merely satisfy consumers as this is the base level of expectation. Businesses need to adapt to ensure they are keeping up with the latest consumer demands and delivering services that will emotionally engage a customer, boosting loyalty for their brand. But what should businesses improve? The research has highlighted three main areas on which businesses should focus:

• Better multichannel conversations
• Offering proactive service
• Personalising customer interactions.

Multichannel conversations

Customers are becoming distanced from companies due to the changing preferences of consumer contact. More and more customers prefer to go online to interact with businesses. Whether it’s to shop or seek guidance, customers expect businesses to have some form of online contact.

Exploiting web channels helps businesses to engage with consumers on their own terms.

The Genesys report finds that email (58 per cent) and web self-service (25 per cent) are the two most popular methods of contact for consumers after telephone communication.

One of the greatest sources of customer frustration, in all countries, is being lost in automated systems. Consumers demand better integration between self-service and assisted service so, if they start an interaction on the web, for example, they can easily reach a live agent if they want to.

It’s important for organisations to develop cohesive strategies across all channels of contact, whether it is phone, SMS or Internet, and to allow consumers to switch seamlessly between different forms of communication in order to make the user experience more flexible.

Businesses offering an experience tailored to customer needs will not only boost customer satisfaction and loyalty but, ultimately, profits.

Proactive service

An average of 86 per cent of consumers per country said they would welcome proactive service if they were experiencing difficulty or would find proactive engagement a strong benefit. In order to exceed customer expectations it is important to know your consumers and what they want, when they want it. This involves monitoring customer interactions and ensuring that each consumer is appropriately engaged at the right time.

Organisations need to adapt their customer service centres to react to a consumer as if they were visiting a high street branch or store: if a consumer is facing difficulty in store, an agent will attempt to engage the consumer to solve their problems. This model needs to be exported to the contact centre to create true brand loyalty – leading to increased profitability in the long term.

Personalised service

Regionally, there are some clear differences in the way contact centres operate. In most European countries, including Germany, the UK and France, customers cannot reach a customer service centre without being charged for the call – a great source of customer frustration. In these areas, giving consumers an option for online contact, webchats/email, or the option for a callback function without charge may be a more consumer-friendly alternative.

A more personalised approach to customer service gives each consumer an experience which is tailored to an individual’s needs. Organisations need to cater for all possible interactions, ensuring each customer is dynamically engaged throughout each interaction according to their preferences – intelligent customer service is a key differentiator in the current market.

Grow your business

Businesses around the world cannot continue to do what they have always done where customer service is concerned. We now know that delivering a positive customer experience is the new business differentiator – get it right and your business will grow.

We also know that to do this, you have to be intelligent, flexible and reactive enough to recognise what makes that experience successful.

Closing service gaps and engaging the consumer more dynamically will ensure that businesses boost customer loyalty and decrease the billions of dollars of lost revenue through customer defections.

Read the full report here.