Consumers feel service is an afterthought

Nearly three quarters of UK businesses see a direct link between customer service and business performance.

Zendesk’s landmark annual research has highlighted the potential for businesses to drive success with a focus on customer experiences - as more than two thirds of consumers worldwide (70%) report making purchase decisions based on the quality of customer service they receive. The global Zendesk (NYSE: ZEN) Customer Experience (CX) Trends Report 2022 shows that a majority of businesses surveyed agree there is a direct link between customer service and business performance. Despite this, almost half of UK customers (48%) feel customer service is an afterthought for businesses, indicating a gap between consumer expectation and company actions.

"Companies cannot afford to have a purely transactional relationship with their customers. Good customer service is a key competitive advantage these days. However, this year's report shows clear gaps between expectations and actual delivery of service," said Matthias Göhler, EMEA Chief Technology Officer at Zendesk. "Customers are noticing this gap, and they're making purchase decisions based on the service they receive. That is perhaps the clearest signal that rapid change is needed at companies."

The report draws on input from customers, agents, customer service leaders, and business leaders from across 21 countries. Data was also gathered from more than 97,500 Zendesk customers who participated in the company’s Benchmark program.

As customers call out increased expectations, and with 44% of UK customers saying they’d switch to a competitor after just one bad experience, the need to close the gap between these expectations and the customer experience delivered have never been more urgent. The opportunity cost for many is nothing short of revenue loss and missed opportunities for growth.

Consistent Truths - Customer Service Can Drive Growth

Nearly three quarters of those surveyed in the UK (74%) see a direct link between customer service and business performance, with over half (57%%) estimating that customer service has a positive impact on business growth. The opportunity is not simply to deliver a single solution-based interaction with the consumer, but to use that point of engagement as an opportunity to deepen the relationship. Customer engagement in the UK is up 12% from the previous year (higher than the 11% global uptick), representing more opportunities to upsell or cross-sell to happy customers.

This cuts both ways though, and the insights reveal that customer expectations can drive or stifle growth plans. As consumers spend more online, a majority say that their customer service expectations have increased in the past year. Channels play a big part in meeting these increased expectations and particularly, being where the customer is. However almost half the companies surveyed did not have a strategic plan for customer service over the immediate to medium term.

Key insights:

· 48% of UK consumers say that their customer service expectations have increased over the past year

· 9 out of 10 consumers (90%) globally say they are willing to spend more with companies who personalize the customer service experience

· In the UK, 84% of consumers say they are willing to spend more to buy from companies that offer them the chance to find answers to their queries themselves

· Companies are evenly divided between those who still view CX as a cost centre and those who believe it is a revenue-generating engine for growth - with only 54% of companies in the UK reporting having a three-year strategic plan for customer service

The Agent X Factor

Increased expectations leads to increased pressure on agents, who are right on the front line of customer’s experience with a business. And their role isn’t simply in answering customer queries - the research found that nearly three quarters of respondents (71%) agree that customer service agents are essential to driving sales.

When it comes to resolving issues, almost half the consumers surveyed are looking for agents who are helpful and empathetic. Given a good experience, customers are also more open to recommendations from service agents. Many businesses, though, have yet to update their view of customer service as simply a cost center. This means that investments in optimizing the function have not kept pace with growth, let alone with increasing customer expectations. In turn, while a majority of businesses acknowledge customer service agents as being pivotal to driving sales, only a very small number of those same agents are extremely satisfied with their workloads.

· Nearly half of consumers say that helpful and empathetic agents are what matters most when they want to resolve a customer service issue.

· 63% of consumers are open to product recommendations from service agents.

· Only 15% of global agents are extremely satisfied with their workloads

Agent empowerment is a clear focus area for 2022, as agent burnout continues to be a challenge. Only 17% of UK agents are extremely satisfied with the quality of training they receive. Paired with the fact that 62% of UK customers feel that businesses need to improve agent training - there is a clear business case for investing in what agents need to thrive. This also includes better performance metrics, clear advancement opportunities and, fundamentally, more respect.

Closing Gaps and Mapping Paths To Growth

Over three quarters (76%) of UK business leaders say that their organization views customer service as a critical business priority, but 57% report that it’s still not owned by the C-suite. While the insights clearly indicate a business case for investments in customer experience, this isn’t necessarily being followed through with executive sponsorship or the right tools or programs, such as training for agents. Alongside this is the need for customer service metrics to be mission critical and reviewed with the appropriate frequency and gravitas. Over 74% of business leaders say the ROI of their organisation’s spend on customer service over the past 12 months has been positive. However, only 30% strongly agree that customer service spending has kept pace with company growth.

"This year's report shows that customer service teams can be catalysts for revenue growth and go far beyond the traditional definition of the customer service department. We need to look beyond just customer satisfaction scores and consider the impact on business success," adds Göhler. "It's the moment for leaders to step in to make positive progress and ensure business success through customer service. Success does not depend on one department alone, but on a company-wide mindset."

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