Surprise finding: companies greatly overestimate their customer service

Some companies think that since they ratcheted up spending on customer service in recent years, it should translate into increased customer loyalty. However, customers are often left  wondering where the service went.

A new study out of Accenture finds a disconnect between perceptions of companies and their customers. The study, which covered communications and high-tech companies, found great awareness that customer services investments need to increase during economic downturns.

In fact, 41 percent of respondents said service and support is much more important during a downturn than during times of robust growth, and virtually all said it is important to their business to invest in service and support during a downturn.

Sixty percent of respondents reported making such investments, from purchasing or merging with another business with superior customer service operations, to building or improving Web support portals, to making business process improvements or creating better knowledge management capabilities.

Regardless of whether they increased or reduced their service and support spending, eight in 10 vendor respondents felt their actions have positively affected the overall customer service and support experience.
However, an overwhelming majority of their customers said they have either noticed no difference in the service and support experience delivered by their vendors, or have even received worse service.

The research also revealed that while 84 percent of enterprise customers thought their vendors valued their business, only about one-fourth of these customers said they were very loyal to these vendors. The situation is even more critical among consumers: Just 40 percent thought their business was valued, and less than 20 percent said they were very loyal to their vendors.

Accenture advocates understanding customers better through analytics. Notably, the research also shows that just 18 percent of vendors are using advanced analytical tools to determine which cost changes would generate the greatest return on investment.

Social media would make a difference as well:

"While vendors said they increased the frequency of communication with customers during the downturn, most customers—especially consumers—were not aware of receiving such communications. Vendors seeking more effective communications should make social media a much bigger part of their service and support activities. By leveraging the power of these tools to intimately connect with customers—especially consumers, with whom vendors often do not have a direct relationship—they can start and maintain a dialogue that helps foster loyalty."

This post was originally published on Smartplanet.com