Consumers demanding better service: survey

Business Times - 19 May 2008

Consumers demanding better service: survey

By OH BOON PING

A MAJORITY of consumers here have quit doing business with at least one company in the past year due to poor service, a survey shows.

The latest Accenture Survey on Customer Service Standards also found that half of the consumers surveyed rate the overall quality of service they received as 'fair' or 'poor/terrible', while 63 per cent said their customer expectations are seldom met.

This was based on a poll of some 300 consumers in Singapore, and the results are similar to an Accenture survey last year in which more than 3,500 consumers in countries including Australia, Brazil, China and the US were polled.

In that survey, 59 per cent of all respondents said they had switched at least one service provider in the prior 12 months due to poor customer service, while the equivalent figure in Singapore was 75 per cent.

About 50 per cent of consumers here felt that service quality was excellent or good - lower than the global figure of 59 per cent.

The latest results come as some 78 per cent of Singaporean consumers have raised their customer service expectations from five years ago, and nearly half said their expectations rose in the past year - significantly higher than the 33 per cent equivalent figure in the global survey.

Woody Driggs, managing director of Accenture's customer relationship management global practice, said: 'Consumers have more information and choices than ever - driving a seismic shift in the balance of power to the consumer and adding to the complexities that companies today face as they seek to attract and retain customers.'

The survey found that the most customer churn occurred in the retail, banking and Internet industries, even though switching providers due to poor services was prevalent across industries here.

Some 32 per cent of respondents said they switched retailers due to poor service, while the figures for the banking and Internet industries were 32 per cent and 24 per cent respectively.

Commenting on this trend, Teo Lay Lim, managing director of Accenture Singapore and Accenture's customer relationship management practice in Asia Pacific, said: 'Few banks and retailers worry about 'churn' the same way a telecommunications company does. Very few companies engage in customer retention programmes proactively. For example, a customer may still retain the bank account, or visit the retailer - and hence the bank or retailer thinks they have not experienced 'churn'. However, the reality is that the share of the wallet may have moved in favour of a competitor.'

The vast majority (89 per cent) of consumers in Singapore also said they expect better service in exchange for spending or purchasing more frequently from a company.

In fact, two-thirds (67 per cent) said they expect 'much better' service for their customer loyalty, compared with only 44 per cent in the global survey.

Ms Teo said the good news to service providers is that price is not the most important thing. 'Accenture's research shows that 69 per cent of respondents said they switched providers because of poor service or product versus 48 per cent who switched because of a lower price. This means that some customers will prioritise service over price in a relationship. Knowing who these customers are will allow a company to provide a higher service level to a customer who chooses to pay a premium for service,' she said.

'This translates into the need to segment customers - because service is not a one-size-fits-all approach if you truly want to excel at it. Service providers need to do it in a way which allows them to actually act on each segment in a differentiated way, so that they are able to translate what they know about the customers into what they do for them. The prize for delivering good service is that Singaporeans will move their business to where the service is better,' added Ms Teo.