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Poor customer service costing Aussie businesses $11 billion a year

By Catherine Knowles, Wed 25 May 2016
FYI, this story is more than a year old

Companies in Australia are losing $11 billion a year due to poor customer service, a 38% and $3 billion increase since 2014, according to new research from NewVoiceMedia.

Since NewVoiceMedia’s initial 2014 survey, the number of Australian consumers who report leaving a business due to inadequate customer experiences has actually decreased from 58% to 48%, but consumers are now spending 49% more with a company over the course of a year before switching.

Top reasons respondents gave for leaving were consistent with the previous study and included: feeling unappreciated (43%), unhelpful/rude staff (36%), not being able to get answers (29%), being passed around to multiple people (27%), being fed up of queuing (26%) and being kept on hold for too long (25%).

“With revenue being transferred between companies at an alarming rate, this research highlights the considerable impact that customers have on a business’s success,” says Jonathan Gale, CEO of NewVoiceMedia.

“Customer experience is the key differentiator, and by doing it well, organisations can drive the customer acquisition, retention and efficiency that make leading companies successful,” he says.

A majority of respondents (52%) indicated calling as their preferred method of communication with a business, and 72% consider calls to be the quickest way of resolving an issue.

However, consumers flagged being kept on hold as the top reason (54%) they dislike calling companies. Respondents also noted not being able to speak to a 'real person' straight away (45%), having to repeat info to multiple agents (45%) and needing to navigate multiple menus (35%) as off-putting.

On average, respondents indicated they would only hold for 11 minutes before hanging up. Consequently, only 40% suggested calls were the most effective way to resolve an issue. Email (25%) and social media (18%) were other channels respondents touted as 'effective' in settling customer service issues.

According to one respondent, a preference for non-telephone communications stems from email’s “ability to thoroughly document the problem and [lessen the] chance of a misunderstanding”. Others explained that social media often spurs response because the channel is public facing.

Faced with poor customer service, more than half (55%) of respondents would never use the offending company again, 47% indicated they’d change supplier, 36% would write to complain, 30% would tell friends and colleagues not to use the company, 15% would post an online review and 15% would complain publicly via social media.

On the contrary, if provided with good service, respondents indicated they would be more loyal (70%), recommend the company to others (66%), use the company more frequently (41%) and spend more money (30%). Only 7% claimed good service would not affect their relationship.

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