Bad customer service costs Canadian communications industry $4 billion annually: Study

Canadian companies lose a whopping $9.7 billion in a year because of poor customer service, with landline, wireless, ISP and television signal distributors among the worst hit, according to a study from Genesys Telecommunications Laboratories Inc. The call-centre-equipment division of Alcatel-Lucent released the results of its 16-nation study, called “The Cost of Poor Customer Service,” which also provides breakdowns country by country. In Canada, companies lost nearly $10 billion in a year. (All financials are expressed in Canadian dollars unless otherwise specified.) Across all of the countries surveyed, the grand sum of cash lost to poor customer service was US$338.5 billion. The United States lost the most – US$80 billion. The average yearly value of a lost customer relationship in Canada was $340 – higher than the international average of US$243, Genesys says. More than 73% of the 523 Canadian consumers polled (Genesys hired Greenfield Online Inc. to conduct the survey) said they’ve ended relationships because of poor customer service, the study contends. And 38 per cent of those customers abandoned their shopping altogether, taking their business out of the economy completely. TV-service and phone companies are among the worst hit, Genesys says. Customer-service issues cost cable and satellite TV providers about $1.2 billion in a year. Wireless service providers also lost $1.2 billion, wireline providers lost $800 million, and ISPs lost about the same amount. Genesys turned to market analyst company Datamonitor and its Ovum subsidiary to develop the numbers. The researchers used a proprietary data model to transform responses from 8,880 consumers in the 16 nations into measurements of the economic value of poor customer service. Technology and people-processes are both to blame, Genesys says. Here’s the company’s list of the main reasons that consumers complain: · being trapped in automated self-service · having to repeat themselves · being forced to wait too long for service · dealing with representatives who lack the skills to answer their enquiries · dealing with representatives who are not empowered “I don’t think it’s necessarily all about the agent,” says Daniel Hong, lead analyst, customer interaction technologies at Ovum. He explains that better customer service has a lot to do with integrating channels – making sure that customers get the level of service they want no matter how they contact the company. That calls for sophisticated customer-service systems, he says – interactive voice response (IVR) platforms that enable customers to quickly find out how much they owe on their phone bills, for instance, and just as quickly allow customers to with live agents to discuss billing discrepancies. “Proactive engagement” was one of the hot buttons for many of the survey respondents. “It surprised us,” says David Radoff, director of communications at Genesys. He explains that across the board, interviewees said they would be happy to hear from companies via e-mail, phone and the web if that helped addressed clients’ particular customer-service needs. For most people, it’s a good thing when an IVR system recognizes that a caller is stuck, and offers to put him through to an agent. Radoff says certain companies in the financial services sector are doing the right thing, using new technologies to engage customers. Some offer to notify clients by text message when mortgage rates hit a certain level, enabling customers to apply for mortgages when the level suits their finances. How can companies be proactive without pestering? “A lot of companies worry about that,” Radoff says. “But consumers want you to engage them proactively. Just do it in a way that is respectful.” Canadian communication-service providers are no strangers to customer-relationship challenges. For some, it’s a regulatory matter. In the spring of 2008, the CRTC ordered Telus Corp. to rebate the network access fee it charged on some of its phone bills. The CRTC said Telus had to give the money back to Alberta and B.C. customers who paid, but didn’t make any long-distance calls, which the $2.95 monthly fee was supposed to help cover. In July, the CRTC announced new communication-service requirements for Canadians living with disabilities. Carriers would have to offer an operator service that converts text messages into voice calls and vice versa, and the service providers would have to offer wireless handsets capable of serving the needs of people who are blind. We could be witnessing an important turning point for automated customer service, notes Hong from Ovum. He says IVR technologies, introduced about 20 years ago, are finally starting to incorporate sophisticated call-routing techniques and best practices in terms of programming. He points to Bell Canada’s Emily program – the front end of the carrier’s customer service system – as one example. The shift from closed telecom technologies to open IP-based systems also opened the door to new channel integrations, Hong says. Companies can connect their web chat systems to their phone systems now, for instance. But there’s still plenty of work to do. Companies in all sectors are testing out new channels, such as Twitter accounts and Facebook pages, trying to figure out which technologies really address customers’ needs, Hong says. “It’s kind of like a duck,” he says: frantic paddling beneath the surface, with what companies hope comes across as smooth sailing on the top.

Bad customer service costs Canadian communications industry $4 billion annually: Study

Broadcast | November 26, 2009

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