Keeping Customers Satisfied Makes Good Financial Sense

Arizona State University’s most recent National Customer Rage Survey finds US consumers’ product and service issues are at a record high, with a third badmouthing brands on social media. This can harm companies financially. Typically, companies with high customer satisfaction have higher profitability and stock returns than those with lower customer satisfaction scores. Plus, customer satisfaction and loyalty lessen the need to constantly acquire new customers and can increase willingness to pay as well as the likelihood that customers will tell others about their good experience.

Automated Customer Service Systems Are US Consumers’ Biggest Source of Dissatisfaction with Customer Service—Except for Those Under 35

Technology has limits when it comes to serving customers and keeping them happy. Many automated interfaces for customer service, used to cope with worker shortages, high labor cost, and constant training of service associates, remain cumbersome or limited in addressing issues, leaving complaints unresolved and causing dissatisfaction. However, consumers under age 35 (i.e., digital natives whose lives have always relied more on technology) seem among all age groups least bothered by and best able to navigate those systems (see the tables below).

• Some structural aspects of the labor market may continue to constrain the availability of human service professionals, who remain crucial for customer satisfaction. Longer-term challenges include an aging population, tighter immigration laws, fewer multiple jobholders, and residual effects from the pandemic (e.g., long COVID, child and elder care challenges). These require thoughtful strategies to attract and retain customer service employees.

• While the selective use of technology in customer service is essential, so is technology’s further advancement. AI capabilities for customer service applications need to progress further to be able to handle more than standard customer requests. The heightened focus on advancing generative AI may benefit natural language processing overall and thereby improve chatbot interactions with customers.

Giving people a choice between chatbot and human service can alleviate pain points and accommodate vastly different preferences among age groups

Source: Multicultural Consumer Survey Q1 2023, The Conference Board

A Clear, Easily Accessible Choice Between a Chatbot and a Human Being Can Keep Customers Happy

Given the variation across age, racial, and income groups in how much and in what specific ways automated customer service systems annoy customers, letting them easily choose between a chatbot and a human being could ease pain points. Posting customer service numbers prominently and providing a quick path to reach a human being without listening to long messages and menus also contribute to customer satisfaction.

• Make it easy for customers to contact a company service representative; this is particularly important when empathy is required. While a robot might be saying all the right words, whencustomers are upset, a human being apologizing and empathizing may be more effective in conveying compassion and calming a customer’s anger.
• Have customer service representatives’ back when handling uncivil customer behavior. Customer hostility has risen, making it important for companies to protect their employees. Given that almost 1 in 5 Americans reports having behaved uncivilly toward a business representative in the past year and almost half have witnessed such behavior by others, customer service teams need to be supported and taught how to handle such incidents.
• Treat your employees like diamonds and they’ll treat your customers like gold. An employee-friendly culture may also benefit customer satisfaction since employee and customer experience are related.

Many customers struggle with automated customer service systems, although dissatisfaction varies significantly by age, race, and income

Source: Multicultural Consumer Survey Q1 2023, The Conference Board

Service Teams Face the Challenge of Dealing with Often Well-Informed Customers and Therefore Trickier Questions

Our findings show that 20-30 percent are unhappy with the quality of service—due to being referred around the organization, not getting their issue resolved, or not getting the appropriate information. Contacting customer service is a last resort for many customers after they have exhausted the resources available to them.

• Customer service teams need to be well trained. Customers’ advanced knowledge means that customer service associates need to be especially well trained on a companies’ products, systems, and processes to be able to answer tricky questions and resolve issues.
• AI can be helpful as a real-time assistant for customer service teams. For example, service associates can use it to display information relevant to the customer’s issue on their screen. But this will only work for simpler inquiries and issues. Complex cases need to be handled by well-trained associates who, as stated above, should be easily accessible to customers from the outset.
• Give customer service representatives decision autonomy. In the interest of addressing customer complaints swiftly and without bureaucracy, a resolution on the spot can delight customers.
• Finding and retaining well-performing service associates might require higher pay. But as mentioned above, keeping employees and customers happy is an investment in customer loyalty and brand value and saves on new customer acquisition.

Long Wait Times to Receive Service Is Another Leading Cause of Consumer Frustration

Long wait times may be the result of two factors: 1) staffing with fewer and less experienced—and therefore likely less efficient—service associates and 2) people’s lower acceptance of wait times given an increased impatience stemming from digital technologies’ newly established standard for pace, instant gratification, convenience, and stimulation.

• Adjusting staffing levels to more adequately serve customers requires investment. But this is an investment in customer satisfaction, loyalty, positive word-of-mouth (while avoiding the negative type, including on social media), and ultimately brand value. It can also lower the high cost of constant new customer acquisition. The National Customer Rage Survey estimates that businesses might lose $887 billion in future revenue due to a dissatisfactory handling of customer complaints.

• Operational transparency is one way to make customers’ perceived experience of waiting better. Research has found that this type of transparency can elevate customers’ appreciation of the value being created as well as their satisfaction, willingness to pay, trust, and loyalty. For example, companies could indicate how many customers are ahead and provide updates, including on the estimated wait time, to let customers recognize their progress. They could also share the specific causes of delayed service. On a phone call, customer service associates could explain what they are doing to help customers appreciate the effort on their behalf.
• Another solution is to give customers the option of a call back at a preferred time. Alternatively, businesses could offer advance scheduling of calls.