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BizReport : Ecommerce archives : March 07, 2016

Is a poor customer service experience benefiting your competitors?

UK brands are counting the cost of poor customer service experience in the billions, according to new research from cloud-based contact center solution provider Magnetic North, as online sales are abandoned and customers head to competitors.

by Helen Leggatt

Magnetic North's survey of 1,000 consumers in the U.K. allowed comparison between buying experiences across multiple sectors including travel, groceries, utilities, TV/broadband and entertainment, among others. Results show that nearly all (92%) of respondents have had a poor customer service experience resulting in 1 in 3 abandoning a purchase.

Based on the Office for National Statistics (ONS) figures on household spending and its own research, Magnetic North said the customer experience problem is not just costing businesses billions of pounds, but at least £234 billion (US$332 billion) a year.

Worse still, consumers are not just abandoning one-off purchases. Instead, a bad customer service experience has long term ramifications with almost half (46%) permanently switching to a competitor. Reasons for switching include difficulty locating customer service contact information (71%), being held in contact center queues with no call back option (66%) and having to deal with contact center agents who have no knowledge of previous interactions (66%).

More than 7 in 10 would consider switching to a competitor if they were required to repeat their customer service query to multiple contacts at a customer contact center and a third would switch immediately if their response time expectations were not met.

"The customer experience landscape has changed, customers now hold the power and they won't hesitate to take their business elsewhere if brands can't meet their demands," said David Ford, Managing Director of Magnetic North. "Businesses will have to adapt to becoming more customer-centric in order to stay competitive."

Such attitudes towards customer service are not limited to the U.K. A survey conducted in several Asian countries by LogMeIn for customer experience consultancy Fifth Quadrant found that nearly eight out of 10 would stop doing business with a company after just one bad customer service experience. Furthermore, 72% would go on to suggest family and friends drop the use of the brand as well.

Their survey found that what most frustrates people is the time taken to reach a brand representative and resolution time, specifically long hold times and automated service menus. Nearly three-quarters (73%) of respondents said they expect a response within 10 minutes if they have contacted a brand by phone and 71% said the same of live chat.

Image via Shutterstock

Tags: customer experience, customer service, research

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