Outlook Point of View January 2008, No. 1 By Robert Wollan Download this article [PDF, 107KB]
PDF Help Robert Wollan is the global lead for service transformation within the Accenture Customer Relationship Management service line. Accenture's latest annual Global Customer Satisfaction Survey provides compelling evidence of how vital the service experience is when it comes to shaping consumer buying decisions, long-term loyalty and the manner in which consumers recommend—or do not recommend—companies, products and services. The study also identifies the key challenges that companies face when providing a high-quality service experience, along with the key factors that determine whether a service experience satisfies or frustrates customers. While consumers everywhere value high-quality service, the factors that determine whether they find a service experience satisfying vary significantly by country. This fact has profound implications for companies seeking to drive growth and high performance by expanding into new geographies. Surveying customer satisfaction in a multi-polar world
The changing contours of today's global economy are having a profound effect on consumers—their expectations, how they interact with companies and which regions of the world contain the greatest concentrations of purchasing power. This "multi-polar world," as Accenture has termed it, is one where economic power is shared by developed and developing nations alike. In such an economic environment, companies must find new ways to grow by attracting and retaining customers—methods that cannot be easily duplicated, or offered at a lower price by competitors. Organizations will have difficulty achieving and sustaining high performance if they do not anticipate the changes in their consumer base. The multi-polar economy was the context for Accenture's latest customer satisfaction study, which surveyed more than 3,500 consumers in the United States, the United Kingdom, Australia, Brazil, Canada, China and France. Results from the research show that the influence of service on consumer behavior continues to grow, as do consumer expectations concerning service quality. Yet, despite higher expectations and the clear impact of service on consumer behavior, few companies are clearly distinguishing themselves on the basis of service quality. In fact, the survey reveals that consumers perceive most providers as mired within the undifferentiated majority—creating a clear opportunity for competitors better attuned to the importance of the service experience. While these trends are true globally, consumers place even greater importance on service quality in emerging markets such as Brazil and China. Understanding these and other regional differences is critical for companies seeking to expand into new geographies—as well as for companies already serving a multinational consumer base. Key findings
Key findings from the Accenture research include: Service quality is the leading reason why consumers leave a provider or choose a new one.
For the third straight year, service quality is the leading reason why consumers leave their providers—both in mature economies, such as the United States and the United Kingdom, and in emerging markets around the globe. A majority of respondents (59 percent) report having switched from at least one provider in the past year due to poor service. In the United States and the United Kingdom, this percent reached a record high (53 percent) according to our annual survey. Overall, service outweighs price by 20 percentage points as a reason for switching. In some countries, the impact of poor customer service is even greater. In Brazil, for example, 75 percent of respondents report switching providers due to poor customer service. Survey results also show that service is the leading consideration when customers choose a new provider. Service leads every other reason for choosing a provider (60 percent), more than price (55 percent), product (34 percent) or convenience (34 percent). In addition, 77 percent of respondents say they are much more inclined to continue doing business with a company that delivers a positive service experience. In short, when it comes to attracting and keeping buyers, the ability to deliver a satisfying service experience is the most powerful source of sustainable competitive edge. No other factor gets closer to the core of what customers care about most. Consumer expectations are rising, with no ceiling in sight.
Expectations are rising. One third of the consumers in our global sample report having higher expectations for service compared to just a year ago. More than half (52 percent) say their expectations are higher today than they were five years ago. Chinese and Brazilian consumers report the highest increase in service expectations: 75 percent of Chinese consumers and 48 percent of Brazilian consumers surveyed report that they expect more from their providers today than they did 12 months ago. Customers keep raising the bar in terms of their expectations. Thus, companies that fail to understand the changing customer landscape and how to tailor their service to customer needs and preferences are extremely vulnerable to competitors. So are companies that approach customer service the same way they did five years ago. The gap is widening between the service consumers expect and the service they experience.
Our survey findings also highlight the gap between consumers' rising expectations and what they actually experience. Companies are failing to differentiate themselves based on service, and are failing to keep pace with the rising expectations of their customers. Few respondents consider themselves "very satisfied" or rate their experiences as "excellent"—and excellence is what's called for in this time of heightened global competition. In fact, 41 percent of our global respondents describe service quality as "fair," "poor" or "terrible" and only 5 percent describe it as excellent. In both Brazil and China, for example, more than half (56 percent) describe customer service as fair, poor or terrible. In France, the number is 66 percent—the largest percentage of all countries we surveyed. What's more, although consumer expectations have risen, the percentage of "very satisfied" consumers has remained flat for every service channel over the past three years. Recommendations
As enterprises target a more diverse global consumer population, the mix of factors involved in delivering a satisfying customer experience becomes more diverse and complex. Based on Accenture research and experience, the following are some keys to driving optimal customer experiences in a multi-polar world. Understand what matters most to your customers.
According to our survey, consumer values and preferences vary significantly by geography. Globally, however, we find five consistent factors critical to a satisfying service experience from a consumer point of view: - The ability to resolve an issue by speaking to a single service representative rather than being forwarded to multiple representatives (named by 43 percent)
- Fast resolution of problems (28 percent)
- High-quality response (27 percent)
- Customer service agent's manner and approach (23 percent)
- Speed of response (22 percent)
Adopt a customer-centric perspective.
To deliver a differentiated customer experience, successful organizations incorporate the customer's perspective into their business and operations strategy, capability development and execution. A customer-centric approach enables companies to understand their customers more deeply which, in turn, helps them deliver a differentiated customer experience. This helps them overcome competitive threats and, ultimately, generate sustainable business results. Make a case for transforming customer service.
Most companies intuitively understand that improving customer service will help improve overall profitability, but few have the facts to support a case for change. Consequently, they make piecemeal investments that under-perform instead of planning for transformational change. The Accenture Global Customer Satisfaction Survey brings the service challenge, and the opportunity, into stark relief. For most companies, competing on the basis of price or innovation is not a sustainable strategy. Few can achieve the superior position held by a price-based leader such as Wal-Mart, or an innovation- based leader such as Apple. Yet delivering a differentiated customer experience— one both satisfying to consumers and profitable for companies—is within the reach of the majority of enterprises. Accenture research supports the proposition that in the multi-polar world, a differentiated service experience—as opposed to just product functionality or price—is the strongest strategy for attracting and retaining customers. If senior executives are to tap growth opportunities in global emerging markets successfully, they must be attuned to the quality of the customer service experience their companies are delivering. Outlook Point of View
January 2008, No. 1
Copyright © 2008 Accenture
All rights reserved. The Outlook Point of View series offers insights about leading trends and innovations across all industries. David Cudaback, Editor-in-Chief
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