CRM failing to satisfy UK customers

Despite the rise of CRM and the success of companies like Siebel, and RightNow, most UK consumers are still unhappy with the service they receive

UK companies are still struggling to retain customers as poor service, with endless waits on the telephone cited as major reasons for customers to move, a major survey has revealed.

Some 65 percent of British consumers have withdrawn their custom because of poor customer service experiences and over a quarter (27 percent) vowed never to return, according to the UK Customer Experience Report 2006 from Harris Interactive.

The same survey revealed that good service is extremely high on most consumers agenda with 78 percent saying they would give more business to companies that provided good service, indicating that good service is as important to many consumers as price.

The survey of 2,300 British consumers was conducted at the end of last year and commissioned by RightNow, an on-demand CRM vendor.

Overall, the survey indicated that the customer experience in the UK is a bleak one with respondents saying that a quarter (26 percent) of their customer service experiences in the last year have been negative.

The survey also indicated that the penalties for losing customers can be high. More than half of respondents (53 percent) said they would need evidence that an organisation's customer service had improved before they would think of returning to a company that had upset them and 48 percent saying that an organisation would have to prove is "valued their custom".

According to Wayne Foncette, RightNow's UK vice-president, the long-standing issue of balancing cost and customer service remains unresolved. "We know that consumers vote with their feet and defect if the customer experience isn't up to scratch; we also know that businesses are being mandated to control or reduce operating costs," he said. "It's a Catch-22 situation: either spend money to improve the customer experience or cut costs and risk losing customers."

Foncette admits he does not have all the answers but says that "what's needed is a breakthrough to resolve this service/cost dilemma that drives enriched customer experience across all key interactions."

Foncette believes that companies have to reduce their cynicism and believe that "positive customer experiences have a major impact on consumers' brand perception". He points to the 78 percent of participants in the Harris survey who said that they would be "most likely, greatly or somewhat" to increase their custom on the basis of consistently excellent service.