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Businesses Failing to Face Ugly Truth of Their Customer Service Shortcomings, Research Finds

Businesses are out of touch with their customers and overestimate the quality of the customer service they provide, according to new research from Pegasystems Inc., the software company empowering digital transformation at the world’s leading enterprises.

Research firm Savanta surveyed 12,500 global customers, businesses executives, and customer-facing employees for a one-of-a-kind, three-dimensional perspective on the state of customer service today.

The research identified key customer service frustrations and revealed that many businesses don’t know their customers well enough to provide the level of service their customers want. It also found that many organizations aren’t fully committed to providing the level of service they aspire to and run the risk of losing customers to competitors as a result.

The good news? Customers, employees, and business leaders all agree on what matters most, so a clear roadmap exists. Key findings of the study include:

• Business decision makers are out of touch: Four times the percentage business leaders (40 percent) as customers (10 percent) rate the current standard of customer service as ‘excellent,’ while only 23 percent of customer-facing staff rate their organization’s service the same way. Similarly, an overwhelming 89 percent of decision makers and 73 percent of employees feel their organization provides an overall positive level of customer service, but only 54 percent of customers feel the same way. In addition, 71 percent of business leaders think they provide better customer service than their competitors – a number that is mathematically impossible to achieve.

• Are businesses really committed to providing good customer service? While 81 percent of business decision makers consider customer service as either their main or key competitive differentiator, 33 percent of customer-facing employees say they face no consequences for providing bad customer service. Meanwhile, 48 percent of customer-facing employees say they face barriers to providing good service.

• Poor service is driving customers mad: 88 percent of customer-facing employees say that customer service is a priority within their business, but the customers tell a different story. Only 11 percent of consumers say contacting customer service is an enjoyable experience. Of those who are dissatisfied, 63 percent would rather clean the toilet than contact a customer service team. Only 10 percent say their typical customer service experience is ‘excellent.’

• Customers feel like organizations don’t know them well enough: Despite 87 percent of business decision makers believing they know their customers well, the vast majority of consumers feel differently. Just 23 percent of consumers say businesses understand them as a person and their customer service preferences ‘extremely well,’ while 63 percent think organizations should make getting to know them better their top priority.

• Poor customer service can cost businesses customers: Seventy-seven percent of customers agree the standard of customer service they receive is a major determining factor in their brand loyalty. In addition, 89 percent say receiving poor customer service from a business damages their impression of the brand. Significantly, 75 percent also say they have previously stopped doing business with an organization because of poor customer service. Forty-four percent report that if they receive a negative customer service experience, they immediately stop the purchase and move to another vendor. Despite this, only 35 percent of business decision makers say they lose customers ‘all the time’ or ‘fairly regularly’ as a result of providing poor customer service.

• Customers know what they want: Consumers highlighted specific areas of frustration within customer service — providing businesses with a clear roadmap for improvement. Their top three frustrations include taking too long to receive service (82 percent), having to repeat themselves when switching between channels or agents (76 percent), and not knowing the status of the query (64 percent). When asked what made for a positive customer service experience, 59 percent agree that a quick resolution of their issue or question mattered most, followed by a need for knowledgeable service agents (48 percent) and a fast response (47 percent).

“Good customer service can be the difference between success and failure. This study tells us that organizations still have a long way to go before they are able to fully meet the expectations of their customers,” said Tom Libretto, chief marketing officer, Pegasystems. “The good news is that there is overall agreement on what matters most. Solutions are available to help businesses understand and proactively address customer issues, while also arming customer-facing staff with the tools they need to provide more contextual, relevant, and knowledgeable service. Customers win, employees win, and positive business outcomes are delivered as a result.

Read ‘The good, the bad, and the ugly: 2019 global customer service insights’ report here: