Survey: Vendors' Customer Service Not As Good As They Think

The study, which polled a dozen services executives at large, high-tech companies and 1,200 of their customers, found a significant disconnect between what the two groups considered quality customer service.

More than half of the executives polled said their companies' customer-service capabilities are among the industry's best and that their customer-service satisfaction levels are above average. Yet, more than half of the companies' customers said they are receiving average to below average customer service from their vendors and that it's getting worse rather than improving.

The study also revealed a stark contrast in priorities between the two groups: Executives are focused on ways to drive costs out of the business by reducing call times or eliminating calls; in fact, more than three-quarters polled had recently implemented a major self-service initiative. Meanwhile, more than half of all customers said self-service initiatives had not improved the quality of their service. Customers also wanted solutions to their entire problem -- not just one piece of their problem -- and they wanted answers fast.

While it's not shocking that customers are looking for more personal attention at the same time vendors are looking for ways to cut costs, what is interesting is the degree of impact that extremely good customer service can have on customer retention and sales.

According to the study, an extremely high customer service rating can result in a 300 percent increase in customer loyalty and a 2.5 times higher repurchase rate. Companies that provide less than extremely high service stand to lose half of their customers to competitors, found the survey.

"Companies that think their services are 'good enough' are really missing the boat," says Brett Anderson, managing director for customer relationship management for Accenture's CommunicationsHigh Tech Practice. "If they provide just even good service, they lose 50 percent of their customers; with average service, they lose 73 percent of their customers. As we all know, the cost of acquiring new customers is very steep."

Of course, self-service initiatives are not going away anytime soon, but analysts found that companies should make sure their self-service systems provide an attractive option to customers and that customers should not feel forced into self-service. The study also found that too many companies are trying to use their service channels as a way to upsell to customers without first making sure they're solving their basic problems.

"They've just got to get through the blocking and tackling before they can upsell," Andserson says.