Barbara Hohbach
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August 07, 2006
Poor Customer Service Drives Nearly Half of U.S. Consumers to Take Their Business Elsewhere, Accenture Survey Finds

Virtually every industry lost business because service expectations weren’t met

NEW YORK; Aug. 7, 2006 – Poor customer service caused nearly half of U.S. consumers to switch at least one service provider over the past year, according to results of a survey released today by Accenture.

The purpose of the online survey of more than 1,000 U.S. consumers was to gain a broad understanding of consumers’ satisfaction with customer service, particularly as technology has assumed a more prevalent role in the delivery of service across industries. The survey covered a wide range of industries, including retailers, Internet service providers, banks, home telephone service providers, wireless/cell phone companies, cable/satellite TV companies, hotels, airlines, life insurers and utility companies.

While nearly half (46 percent) of respondents reported they quit doing business with a company in at least one industry category in the past year as a result of poor service, some industries fared worse than others. For instance, retailers suffered the greatest number of customer defections due to poor service, which was selected by 18 percent of respondents, followed by Internet service providers (15 percent), banks (14 percent), home telephone service providers (12 percent), wireless/cell phone companies (11 percent) and cable/satellite TV service providers (10 percent). Utility companies and life insurers suffered the fewest customer defections (selected by 3 percent of respondents each), followed by airlines (4 percent) and hotels (6 percent).

At the same time, newer technologies don’t seem to be improving consumers’ satisfaction with customer service. Nearly six out of 10 (57 percent) of respondents said customer service technologies such as automated phone service and live online chat had not done anything to improve service levels.

Looking at the channels customers use to obtain service, the survey revealed satisfaction was lowest for automated phone service, with only 15 percent of the consumers indicating they were satisfied or very satisfied with these self-service options. By contrast, six out of 10 (61 percent) of those surveyed said they were satisfied or very satisfied with in-person services, followed by 57 percent who responded similarly about live phone service, as did 40 percent of consumers regarding email services and 31 percent about the use of online chat.

The current survey also identified different reactions to customer service based on gender and age. For example, women were more likely than men to ask to speak with a supervisor when dealing with a bad customer service experience over the phone (59 percent vs. 46 percent), while men were more likely to hang up the phone and call back (19 percent vs. 13 percent). Women, however, were more likely than men to complain about repeating their information to multiple service representatives (75 percent vs. 64 percent). More women than men also said a customer service representative’s manor and approach is important (30 percent vs. 24 percent).

Younger consumers — those under the age of 40 — appear to be the least prone to loyalty, and they were significantly more likely than those over age 55 to say they have switched providers in the past year because of poor customer service (54 percent vs. 37 percent, respectively). One in five (22 percent) of younger consumers say they have hung up called back in the hope of reaching a different representative, compared with only 13 percent of those over age 55.

“Good customer service takes a lot of work to assemble within an organization – high performing businesses are keenly aware of what frustrates their customers and focus on understanding their customers’ varying preferences and intentions,” said Woody Driggs, managing partner of Accenture’s Customer Relationship Management practice. “They use this knowledge to help them tailor services in a way that helps to foster consumer loyalty, while teaching and creating a customer service culture among their staff to deliver a consistent customer experience.”

The Accenture survey also provided insights about which aspects of customer service most frustrated consumers. Those most frequently identified by the respondents included: being kept on hold on the phone too long (selected by 72 percent of respondents); having to repeat information to multiple service representatives (70 percent); the inability of customer-service agents to answer questions (66 percent); and customer service representatives marketing more services or products to callers (60 percent).

When asked to estimate the amount of time they typically spend on hold waiting for service, respondents, on average, said approximately seven minutes, with 47 percent of consumers identifying wait times of less than five minutes.

“High-performing companies recognize that customer satisfaction is built or destroyed by how well they coordinate every step of each interaction – they’re focused on translating their existing service technology investments into satisfying experiences that keep customers coming back,” said Robert Wollan, Accenture managing partner, Customer Contact Transformation. “As industries fall victim to commoditization and barriers to changing service providers are removed, those that neglect any aspect of the customer service experience risk losing market share to competitors as was apparent in these survey findings.”

On behalf of Accenture, ICR queried more than 1,000 U.S. consumers online in May 2006. The sample included a nearly even split of men and women, and data was captured relative to age and income. Results were reported at the 95 percent confidence level with a 3.1 percent margin of error of the online panel.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 133,000 people in 48 countries, the company generated net revenues of US$15.55 billion for the fiscal year ended Aug. 31, 2005. Its home page is