Customer experience and personalization are viewed as pivotal differentiators these days, especially for loyalty marketers. But a new study from Pegasystems that marketers have a long way to go in that department.
According to the new survey, service-centric businesses have not progressed beyond the fundamentals of customer service at a time when consumer expectations are reaching new heights. What’s more, the survey reveals that 74% of business decision-makers admit their customer service initiatives are primarily focused on ‘getting the basics right’ even as consumers demand more advanced personalized experiences.
The U.S. survey of more than 1,000 participants–a combination of consumers and business decision makers from key customer service-centric industries, specifically retail banking and telecommunications/broadband–also sheds new light on the perception gap between how well businesses think they perform versus what their customers actually experience.
Here are some key takeaways from the study:
Still getting to know you: While 66% of responding telco/broadband and retail banking companies claim they deeply know their customers, only 24% of telco/broadband customers and 41% of banking customers believe the same. Another 20% of telco/broadband and 6% of retail banking customers feel these businesses don’t know their preferences at all. This level of knowledge is critical for companies to anticipate customer needs and personalize the customer journey.
The need for speed: While nearly 60% of businesses believe their customer service representatives quickly respond to their customers every time, the majority of consumers disagree. In fact, only 27% of telco/broadband customers feel their provider meets this speed threshold. This indicates businesses need to speed up response time to meet customer expectations.
Can you hear me now?: Customers say that one of their top three customer service problems is with companies that fail to listen to their needs, despite the fact that retail banking organizations optimistically self-rank this capability as their top customer service attribute, indicating a major disconnect.
Will they stay or will they go?: Twenty-seven percent of retail banking customers and 38% of telco/broadband customers say it is likely they will switch one of their providers in the next 12 months. However, on average, these businesses feel their annual churn rate is only around 18% (17% for retail banks and 19% for telco/broadband). This indicates more customers may be at risk to switch than businesses believe.
Still mastering Customer Service 101: Only 20% of businesses are working on developing omni-channel integration capabilities, which underscores the point that most organizations are focused on mastering the basics at the expense of advanced services that can help them better engage with customers.
Digital disruption lurks in the background: The survey found businesses underestimate the threat from new, innovative providers as 61% believe the biggest competition still remains with other traditional providers within their existing market. But, more than 50% of telco/broadband customers said they would consider a new innovative service provider in the future. The threat is not as high for retail banks as only 36% of their customers said a switch to a new innovator was likely.
Social media trends at the top of the tech agenda: Retail banking organizations investing in customer experience say that social media (cited by 60% of respondents) ranks as the top technology priority, followed by mobile (56%), marketing (54%), and analytics (38%).
The technology priorities for telco/broadband organizations are similar but in a slightly different order, as their top-ranked investments are mobile (62%), social media (60%), analytics (60%), and marketing (54%). Interestingly, while social media makes both lists, only 1% of customers reported social to be the best channel for customer service, with the majority preferring telephone or face-to-face interaction.
Who’s leading in customer service?
Hotels best cater to customer needs, the report says: Consumers in the U.S. rank hotels (46%), restaurants (42%), and banks (38%) as having the best customer service, while industries such as telecom (10%), utilities (7%), and legal services (7%) lagged behind.
Brick and mortar provides better retail shopping experiences: Traditional retail shops ranked fourth (24%) while ecommerce sites (10%) fell to the bottom of the list, which supports conclusions about shoppers’ preference for face-to-face customer service over digital interaction.
CEOs lead the customer experience charge: Nearly 50% of companies said their Chief Executive Officer is responsible for leading customer experience, while 21% said it falls on the Chief Financial Officer. Interestingly, only 13% selected the Chief Customer Service Officer and 7% said it was the Chief Marketing Officer’s responsibility.