Companies Are Losing $1.6 Trillion Due to Bad Customer Experiences, Accenture Finds

When it comes to poor customer service, 52 percent of consumers have stopped doing business with companies because of it. And once companies have lost those customers, 68 percent will not return, resulting in an estimated cost to U.S. businesses of $1.6 trillion, according to new research from Accenture.

In its latest Accenture Strategy Report, titled "Digital Disconnect in Customer Engagement," the firm uncovered plenty of room for improvement in customer service delivery. Eighty-two percent of customers who have switched companies feel the company could have done something to retain them, with 83 percent saying that if companies had provided them with better live or in-person customer service, it would have impacted their decision to switch.

In fact, 45 percent of consumers said they would be willing to pay more for goods and services if it ensured a better customer service experience. Another 73 percent said they expect customer service to be easier and more convenient, and 61 percent want it to be faster.

But perhaps one of the most overlooked elements is the human connection, which the research found to be a vital component of customer satisfaction, even in the digital age. The study found that 83 percent of U.S. consumers prefer dealing with human beings over digital channels to solve customer service issues. Almost half (45 percent) would even be willing to pay more for goods and services if it ensures a better level of service.

Physical or in-store experiences are also highly valued among consumers: 65 percent agree that in-store service is the best channel for getting a tailored experience, and 46 percent say they are more willing to be sold new or upgraded products when receiving a face-to-face service compared to online.

"Companies have lost sight of the importance of human interaction and often make it too difficult for consumers to get the right level of help and service that they need," said Robert Wollan, senior managing director, Advanced Customer Strategy at Accenture. "Companies wrongly assume that their digital-only customers are their most profitable and that customer service is a cost. Consequently they over-invest in digital technologies and channels and lose their most profitable customers—multichannel customers who want experiences that cover both digital and traditional channels."

Kevin Quiring, managing director of advanced customer strategy and North America lead at Accenture, agrees."U.S. companies have reached a tipping point in their customers' digital intensity and need to rebalance their digital and traditional customer services investments if they want to improve loyalty, differentiate themselves, and drive growth," he said in a statement. "Companies abandon the human connection at their own risk and are facing the need to rebuild it to deliver the varied and tailored outcomes that customers demand."

And while switching touches every industry, the highest percentage of defectors due to poor customer service can be found in retail (27 percent), cable and satellite service providers (13 percent), and banking (10 percent). Retail improved a little from 2014, when 30 percent of consumers admitted to leaving companies because of poor experiences, but the other two industries performed even worse than a year ago: Cable/satellite was up from 11 percent in 2014, and banking was up from 9 percent in 2014.

Companies in these industries, and any company that wants to rebalance its digital and traditional customer service channels, should look to do the following:

  • Put the human and physical elements back into customer service: Rethink your investment strategy. The focus should be on delivering satisfying customer experiences – not methods of interaction. Ensure your channel management approach delivers integrated experiences.
  • Make it easy for customers to switch channels to get the experiences they want: Build customer service channels that enable consumers to move from digital to human interaction to get the outcomes they desire.
  • Root out toxicity: Define and address the most toxic customer experiences across all channels. These experiences can directly impact profitability. Identify the experiences that have the greatest potential downside and leverage those insights to guide an investment strategy.
  • Guarantee personal data security: 92 percent of consumers say it is extremely important that companies protect the privacy of their personal information. By not selling or sharing customer data with other companies and guaranteeing that safeguards are in place to protect it, consumers will be more willing to hand over personal information which can be leveraged to deliver better experiences.

The Accenture Strategy  report is based on the company’s annual Global Consumer Pulse Research, which gauges the experiences and attitudes of nearly 25,000 consumers around the world about marketing, sales, and customer service.