Expectations increased most in emerging economies
NEW YORK; Jan. 7, 2008 – Companies are not keeping pace with consumers’ rising expectations for service, especially in emerging economies, according to results of a global study released today by Accenture (NYSE: ACN).
The findings are outlined in a new report, “Customer Satisfaction in the Multi-Polar World: Accenture 2007 Global Customer Service Satisfaction Survey Report,” the third in a series of annual studies designed to examine consumer attitudes toward customer service. While the studies in 2005 and 2006 focused on the United States and the United Kingdom, the 2007 report expanded the geographic scope to also include Australia, Brazil, Canada, China and France.
Consumer Service Expectations Increasing
More than one-half (52 percent) of the more than 3,500 consumer respondents surveyed this year across five continents reported that their expectations for better service have increased over the past five years. Additionally, one-third (33 percent) said they have higher service expectations today than they did just last year.
Expectations increased the most among consumers in emerging economies. More than nine out of 10 consumers in China (93 percent) said their expectations for better service had increased over the past five years, and 75 percent said their expectations are higher than they were a year ago. In Brazil, nearly half (48 percent) of respondents said that their expectations had increased since last year.
The findings indicate that increases in customer service expectations continue to outpace efforts made by companies to improve service. Globally, nearly one-half (47 percent) of survey respondents said their expectations were met only “sometimes,” “rarely” or “never.” The highest level of dissatisfaction was found among Brazilian consumers, with two-thirds (67 percent) of those respondents reporting that their expectations are met only “sometimes,” “rarely” or “never.”
Even in developed economies, where companies have spent billions on customer service capabilities, dissatisfaction with service remains high. For instance, more than half (52 percent) of U.K. consumers said the frequency with which their customer service expectations are met is “sometimes,” “rarely” or “never.”
Gap Between Service and Consumer Expectations Contributing to “Churn”
The gap between service expectations and the services consumers receive translates into lost business. A majority (59 percent) of consumers in developed and emerging economies reported that they quit doing business with a company due to poor service; the figures were significantly higher for consumers in the emerging economies of China and Brazil -- 85 percent and 75 percent, respectively. Additionally, the findings found an increase in the number of U.K. consumers who reported a significant increase in switching service providers due to poor service -- 58 percent, up from 50 percent in 2005.
“Consumers are empowered with more knowledge and choices than ever — driving a seismic shift in the balance of power to the consumer and adding to the complexities multi-national corporations face,” said Woody Driggs, managing director of Accenture’s Customer Relationship Management practice globally. “Consumers in developed and emerging economies alike have shown their willingness to stop shopping at companies that can’t meet their service expectations.”
The study found that customer churn resulting from poor service remained prevalent across industries. Retailers, banks and Internet service providers were the industries most frequently identified by consumers as those where poor service had led them to take business elsewhere -- selected by 21 percent, 21 percent and 20 percent of all respondents, respectively.
Knowledge of Diverse Consumer Preferences Must Underpin Service Delivery
To begin to address the service issues identified in the findings, the Accenture report recommends that organizations incorporate the customer’s perspective, values and actions into their business and operations strategy, and into their capability development and execution. For instance, 43 percent of consumers surveyed identified the ability to resolve an issue with a single call rather than speaking with multiple service representatives as one of the most important aspects of a satisfying customer service experience. By contrast, only 22 percent identified the speed of the response.
“To differentiate themselves, rebuild loyalty and fend off competition for valued consumers, leading companies respond by consistently delivering an experience that is tailored to the customer,” said Robert Wollan, managing director of Accenture’s CRM Service Transformation Management Consulting practice. “Competing in multiple countries has made this an even more complex challenge, and companies are finding that a ‘one size fits all’ experience — even an improved one — won’t be enough to drive growth around the corner, let alone around the world.”
More than four out of 10 (41 percent) of all respondents reported that the overall quality of service they receive is “poor/terrible” to “fair.” The most severe evaluation of quality was rendered by French consumers, with 60 percent of them saying that the service they receive tends to be “poor/terrible” to “fair.” Although satisfaction with service was highest in the United States, only 7 percent of U.S. respondents rated it “excellent,” and 28 percent said it was “poor/terrible” to “fair.”
Additionally, when asked if they expect better service in exchange for spending or purchasing more frequently from a company, 71 percent of respondents said they expect “much” or “somewhat” better service. The expectation for “much better service” when spending more was particularly strong among Chinese and Brazilian consumers, at 83 percent and 63 percent, respectively. Expectations of consumers in developed countries were a bit lower: 35 percent in the United Kingdom, 38 percent in Canada and 39 percent in the United States.
Country by country, the mix of factors that determine whether an experience is satisfying or frustrating varies, as do consumers’ responses to poor service. For instance:
- Consumers in the United Kingdom were more likely than those in China to report being frustrated when left on hold too long while speaking with customer service representatives (81 percent versus 59 percent).
- The ability to interact with just a single customer service representative is more important for respondents in France, Brazil and Canada — selected by 39 percent, 34 percent and 32 percent of respondents in those countries, respectively — than it is for Chinese consumers (12 percent).
- Brazilian consumers were the most inclined to identify lack of personalized solutions from companies as a service frustration – cited by 63 percent of respondents in Brazil -- while it was considerably less important to U.S. and U.K. consumers, cited by only 37 percent of respondents in each of those countries.
This report highlights the frustrations consumers face and the need for companies to implement customer-focused programs that can improve services.
“To keep pace with rising customer expectations, enterprises must continue to reinvest in their customer-facing capabilities,” said Matthew Goldman, Gartner research vice president. “Through use of internal or external capabilities, successful enterprises will develop or enhance their understanding of changing customer preferences and how to deliver on those needs.”
The Web-based survey of 3,552 consumers in Australia, Brazil, Canada, China, France, the United Kingdom and United States was fielded in July and August 2007. The findings served as the basis for the new white paper, “Customer Satisfaction in the Multi Polar World: Accenture 2007 Global customer Service Satisfaction Survey Report.” In 2005 and 2006, Accenture conducted similar studies in the United States and the United Kingdom.
Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With more than 175,000 people in 49 countries, the company generated net revenues of US$19.70 billion for the fiscal year ended Aug. 31, 2007. Its home page is www.accenture.com.