As sales on digital channels rise, so do complaints: Study
Mumbai: Even as companies are investing significantly in digital technologies to create more personalized connections and drive profitable growth, it is instead producing the opposite results. Companies are losing customers as consumers demand more human interaction in customer services, according to a new report.
Over the past couple of years, organizations have increased their investments in digital technologies and channels to support customer services significantly, due to the potential of digital technologies to reach a larger volume of people at a cheaper cost. However, the over-reliance on these channels to solve customer queries and issues has given rise to “human-less” customer services, and it’s not being well received by consumers, according to the Accenture Global Consumer Pulse Report 2015, which notes that the number of dissatisfied consumers switching their products or service providers has increased over the years and is now globally a $6.3 trillion opportunity for companies who can get their customer service part right.
In India, 88% consumers have switched their service provider in the past year because of poor service. Industries in which consumers have switched service providers include internet service providers, retailers and banks due to poor customer service, said the report which surveyed 24,489 consumers in 33 countries, including India, between 18 August to 30 September.
“Huge investments are being made in digital channels, and investments in physical channels is going down and that should not happen,” said Raghuram Devarakonda, managing director of Accenture Strategy—Sales and Customer Services, while pointing out that the most profitable consumers are those who interact with the company across multiple channels.
As such, physical or in-store experiences remain highly valued amongst consumers with 51% agreeing that in-store service is the best channel for getting a tailored experience, and 49% saying they are more willing to be sold new or upgraded products when receiving a face-to-face service compared to online. Another 44% say they would rather go to a store first than use digital channels to get advice on the best products and services.
In the past year, brick-and-mortar retailers like Tata group, Aditya Birla Group, Reliance Industries Ltd and even large retailers like Arvind Ltd have launched their online shopping ventures which are separate from their brick-and-mortar retail businesses as they look at the digital space to lead the next wave of growth for their organisations. To be sure, some of these companies are also offering consumers a multi-channel presence across digital and physical by giving consumers facilities like click (buy online) and pick (at store) or shop at store and get the products delivered home among other options.
Meanwhile, etailers like Pepperfry, an online furniture retailer, Lenskart, an Indian eyewear brand, are also opening brick-and-mortar stores as they look at offering consumers the retail experience.
Others like Spencer’s Retail Ltd, part of the RP-Sanjiv Goenka Group, Godrej Natures Basket, part of the Godrej Group, and Titan Co. Ltd, the maker of Tanishq jewellery and Titan and Fastrack watches, have acquired online portals as they look at new ways to reach consumers.
To be sure, consumers shop across channels. Over half the consumers or 51% of customers research online and subsequently visit a store to purchase, whereas 17% consumers first visit a store and then purchase online. About 44% of customers do both research and buy online and close to a third of the consumers research online, then visit a store and finally buy online, said Ashutosh Pandey, chief executive officer, Tata CLiQ, the e-commerce platform of Tata group company Tata UniStore Ltd, at the launch of the portal in May.
Also multi-channel customers are the most profitable. In the retail sector, multi-channel customers are responsible for 3.2 times the sales and 2.6 times the margin of store-only customers. In banking, multichannel customers purchase 1.4 times the products and are 15% more likely than digital-only customers to serve as advocates for their providers. Consumers are more than twice as likely to be upsold (45% versus 18%) through human interaction than through a digital channel, said the Accenture study.
“Customers aren’t as predictable as we’d like to think. This is certainly evident in the way they choose their interaction channels. Nearly half of consumers (48%) are comfortable crossing back and forth between digital and physical interactions with companies, even within a single interaction,” said the Accenture report, while noting that customers choose the form of engagement they believe will best solve a particular problem, satisfy a goal or simply provide the best experience.
Hence, nearly three-fourth or 73% of consumers will choose a human over a digital capability when seeking advice or looking to resolve a service issue or complaint, said the report, adding that businesses 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. For example, often customers require some time-sensitive advice or live confirmation while cancelling their contract or service agreement. They do not want to talk to customer service representatives all the time, but there are times when it matters the most. It is then that a company’s ease of accessibility is put to test. Not surprisingly, complaining on social media about poor customer experience is the norm for over half (53%) of consumers who admit taking to social channels in order to vent.
However, for companies that get the online and physical service balance, consumers are willing to pay a higher price for their service. About 63% of consumers say they are willing to pay a higher price for goods and services if it ensures a better level of service, said the report, while pointing out that there is still a long way to go as nearly 65% expect customer service to be easier and more convenient, and 83% want it to be faster.
Editor's Picks »
- With demonetisation and GST, Indian economy gets more formal in 4 years of Modi govt
- Tax reforms in four years of Modi govt: GST makes tax evasion tougher
- Development became vibrant over last 4 years: Narendra Modi
- Arun Jaitley says political debate to focus on Narendra Modi versus ‘anarchist combination’
- The Narendra Modi lexicon, updated list