According to a study published by Qualtrics, declining customer service performance has exposed an annual risk of AU$74 billion to the financials of businesses.
The report underlined the rising determination of Australian consumers to reduce spending when they experienced poor consumer services.
$74bn loss risk for firms from poor customer service
Published following an analysis of some high-visibility incidents involving poor customer service by well-known brands last year, the report is aimed at underscoring the importance of customer service on business outcomes in Australia.
The report also gives tips on how enterprises can enhance their interactions with customers to boost profitability and grow customer loyalty.
According to the research, the sectors that have given the worst experience in customer service are fewer in number: streaming providers, supermarkets, department stores, electronic manufacturers, and online retailers.
On the other hand, organizations with the largest range of bad experiences recorded have been government agencies, property insurers, internet providers, utility companies, and mobile phone providers.
According to Qualtrics, Australian businesses are at risk of losing up to AU$74 billion due to poor customer service. A trend amplified by the rise in the proportion of Australian consumers who opted to boycott a company after having had a bad customer experience, with that figure now surging to 55% from the previous level of 37% 12 months ago.
It also shows that fewer customers are having bad experiences. It said one in every ten interactions with brands is currently resulting to a poor experience, down from last year’s one in every five interactions.
Another quarter of the respondents claimed that there were general improvements with customer service over the past year, where customer service representatives are more knowledgeable, having shorter wait times, and having better product quality.
The research finds that 41% of Australians think AI will improve customer service levels.
Advent of AI
With the advent of AI, consumers most definitely are expecting faster service times, improved complaint and enquiry resolution, and quicker delivery times.
As reiterated by Moira Dorsey, Principal XM Catalyst at the Qualtrics XM Institute, “All it takes is one bad experience or wrong move for an organisation to be punished. that’s why in 2024 companies need to be more careful than ever not to mistreat customers.”
It’s important to note that bad customer experiences have a major influence on the bottom line, making AI very significant in reducing the occurrences of such.
The study indicates that bad customer experiences directly relate to lost revenue in Australia. After 41% of all bad experiences, consumers reduce their spending, and after another 14% bad experiences, they stop spending altogether.
But Dorsey added, “Customers are placing a premium on human connection, and the most successful AI strategies are designing for this. Those that do this will be rewarded with increased sales, more satisfied customers, and highly engaged and productive employees.”
