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2016 Consumer and Service Report
- 2016 -
Consumer and
Service Report:
Expectations and
Outcomes
What customers expect of good service and
how it can impact your ROI
© 2016 all rights reserved | proonto
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2016 Consumer and Service Report
Key Points
66% of American consumers are willing to spend
more money with a company that provides them
with excellent customer service.
60% of consumers say they did not make an
intended purchase following a negative customer
service experience.
Phone is by far the most popular way for
customers to contact service, but other options
like live chat are quickly rising.
Customers value responsiveness, efficiency,
and speed of getting issues resolved in service
providers, whichever platform is used.
Luxury customers have higher standards of
service and lower tolerance for poor service.
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2016 Consumer and Service Report
THE IMPORTANCE OF CUSTOMER SERVICE
FOR ONLINE RETAILERS
Recently, a new report was released by Business Insider about the
importance of customer service in today’s world. For retailers, and
online businesses especially, the quality of customer service can have a
direct effect on a company’s profits. In fact, Microsoft reports that 66%
of American customers say that they are "willing to spend more money
with a company that provides them with excellent customer service" and
that nearly as many (60%) have declined to purchase with a company who
provides "poor" customer service.
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Email is preferred by nearly half of consumers when they are
requesting assistance
Fueled by consumers’ desire to price-compare and with the
increasing ease of online shopping, eCommerce sales have been rising
steadily and this trend is only expected to grow. As online shopping
increasingly becomes many customers’ preferred method of making
purchases, customer expectations for service have shifted as well. Return
rates for online purchases are high, around 30-40% according to Business
Insider, so companies must be able to solve customers’ problems and
answer their questions as smoothly as possible.
The data demonstrates that customers put great importance on
customer service. Customers expect to be able to reach out to businesses
in order to resolve their questions and issues at multiple points in the
purchasing pipeline, including after the product has been received.
They are using a variety of channels to do so including phone,
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2016 Consumer and Service Report
email, live chat, social media and even mobile messaging services. The
data in this report focuses on human-based service providers, but it must
be acknowledged that service bots are poised to play a larger role in how
companies communicate with their customers. While bots have yet to take
over the service industry, it’s sure to be a trend to keep an eye on.
Meanwhile, the onus is still on the businesses to provide support
that is both accessible and high-quality to match customer expectations. To
that end, the more expensive the product is, the more customers expect a
superior level of service. Boutique and luxury retailers experience a nearly
50% rate of customers demanding an apology or even a refund following
a negative customer support experience according to Spherion.
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60% of consumers in the US will spend more with a company that
provides them with excellent customer service
With all of this in mind, we can begin to understand the trends
in service providing and in customer expectations more clearly. When
customers are making purchases without getting to hold and see the
product in person, they expect this diminished shopping experience to
be compensated for by stellar service. For this reason, customer service
is becoming a strong predictor of whether or not a customer will make a
purchase and therefore it is becoming a matter of critical importance to
online retailers. What we can learn from the data is what customers hope
to achieve when they contact customer service, what their priorities are
in the communication process, and the impact that service can have on a
company’s bottom line.
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2016 Consumer and Service Report
Most Importnt Factors That
Influnce US Consumers'
Purchase Desicions (2014)
61%
Sales/
competitive
pricing
36%
Superior
products
35%
Superior
customer
expirience
31%
Loyalty
programs
26%
Relevant
promotions
6%
Engaging
advertising
campaign
3%
Celebrity
endorsment
WHY IS CUSTOMER
SERVICE IMPORTANT?
Data from a 2014 study by Accenture demonstrates that a good "customer
experience" can be a deciding factor in a shopper’s decision to make a
purchase. Participants were asked what was most influential in their
decision to make a purchase and "superior customer experience" came in
third at 35%, just 1 percentage point behind "superior products". Perhaps
unsurprisingly, the most important factor was sales/competition pricing
at 61% and the least important factor was "celebrity endorsement" at 3%.
The numbers show that customer service has a direct and
significant impact on sales and profit. Microsoft reports that roughly
66% of Americans will not only make a purchase, but they will spend
more money than they originally might have intended to with a company
Source: Business Insider & Accenture
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2016 Consumer and Service Report
that they had a positive customer service experience with. Meanwhile,
according to an American Express report, nearly as many customers (60%)
did not go through with a purchase following a negative customer service
experience. According to Genesys’ data, this means about $83 billion in
lost sales due to poor customer service experiences.
HOW ARE CUSTOMERS
REACHING OUT?
The digital age has made communication between customers and businesses
easier than ever. There are more ways to contact a company and higher
expectations for speed of response. Despite this, it’s understandable that
people often stick to what they are familiar with, and according to a report
from the North Ridge Group, 77% of American consumers still reach for
the phone as their first method of communication with a company when
any urgent issue or question arises. However, only slightly more than half
of consumers report that their issue gets resolved with just one phone call.
Still, the phone remains unequivocally the most popular communication
method for assistance, with a Microsoft report showing that 81% of
Consumer Service Channel
US Customers Use First For
Urgent Issues (2015)
77%
Phone
8%
Live chat
8%
Email
2%
Social media
Source: Business Insider & North Ridge Gruop
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2016 Consumer and Service Report
Consumer Service
Channel US Customers
Use First For NonUrgent Issues (2015)
8%
Live chat
24%
Phone
4%
Social media
47%
Email
American consumers regularly phone in to customer service.
In terms of communication channels, what customers value the
most is speed and efficiency. Microsoft reports that their research shows
that 34% of American consumers name "getting their issue resolved quickly"
as the number one priority in determining whether a customer service
experience was a positive one. Accordingly, 22% of American shoppers
report that being transferred between service agents is the most frustrating
aspect of calling into customer service. For most consumers, patience and
tolerance for waiting times is low. When asked how long they are willing to
wait to speak to the right person, 43% of respondents said 1ˉ3 minutes, 39%
said 5ˉ10 minutes and 18% said more than 10 minutes in a recent Microsoft
study. StellaService’s data shows that at the top 25 retailers it takes only 49
seconds to reach an agent, however they do not offer data for how long it
takes to reach the right agent for a particular query.
EMAIL
Coming in second in customer support channels is e-mail, which is used by
78% of consumers regularly. Email is preferred by nearly half of consumers
Source: Business Insider & North Ridge Gruop
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2016 Consumer and Service Report
when they are requesting assistance with a non-urgent issue, with 71%
of customers reporting that customer service via email meets their
expectations and 13% reporting that it exceeds their expectations according
to a North Ridge Group study. Email-based support communication
usually takes between 1-2 messages to resolve a customer’s query. The
main issue facing retailers in providing strong email based customer
service is ensuring that emails are answered. A SuperOffice report shows
that roughly one-third of retailers do not respond to email queries at all.
This non-response can lead to the customer feeling that they have had a
negative service experience. Responses are also often not sufficient, and
according to Business Insider half of American shoppers say that they get
a response acknowledging that their email has been received and just 37%
report that their issue was resolved via email.
LIVE CHAT
Live chat software is growing in popularity as an option for customer
service communication. While larger merchants have been a bit slower to
adopt live chat technology, they are beginning to embrace it with major
stores such as Norstrom and Walmart integrating live chat capabilities
into their site. However, live chat still remains most popular among small
and medium sized businesses, many of which were founded as onlineonly stores to begin. As more and more businesses are offering live chat
services, customers are also becoming more likely to expect and to desire
a live chat option, so it seems probable that even large brick-and-mortar
retailers will increasingly adopt the technology.
While phone and email services are usually contacted for support
issues, often after a purchase has already been made, live chat agents
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2016 Consumer and Service Report
What Information US
Shoppers Expect A Retail
Sales Associate To Know
(2015)
34%
Which
product is
the most
popular
47%
The best
product for
my spesific
needs and
budget
56%
Which
product is
the most
reliable
64%
Which
product has
the highest
quality
65%
Which
product
offers the
best value
are interacted with in much the same way as a customer would interact
with a salesperson in a store. Chat support is often used by the consumer
during the shopping process, a factor that leads to retailers seeing as much
as a 100-300% increase in order size when shoppers chat with a service
agent during the buying process. This is because in addition to feeling
more comfortable about purchasing from a company that consists of real
people, live chat agents are able to cross-sell and upsell while a customer
is still deciding what their final purchase will be. This also reinforces
the importance of making sure that whoever is manning the live chat is
prepared to act as a salesperson as much as a support agent.
The fact that shoppers will often communicate with live chat
agents during the purchasing process, and not after, presents a unique
challenge for businesses who are interested in offering this feature.
Source: Business Insider & North Ridge Gruop
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2016 Consumer and Service Report
Live chat agents are expected by customers to know much more about
the range of products and how the products work because of the
fact that they are speaking with them while comparing their options.
As opposed to customer service agents who may need to know how to
handle returns, how to troubleshoot, and what various company policies
are – live chat agents must be prepared to answer questions about which
product is best suited for the customer. This means that companies must
invest in manning their live chat with quality agents and must also make
sure that the agents are prepared to handle a wide range of questions. In
order to maximize the potential ROI of the live chat channel, it’s important
that the agents are experts on the company and its products. When done
well, live chat has the greatest potential of all of the communication
channels to increase sales.
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48% of luxury customers who have a negative customer support
experience demand an apology, refund or incentive
Like phone and email, live chat software can also have its downfalls
that companies considering its implementation should be aware of. Some
live chat plugins can slow down a website, so it’s important to ensure that
the chosen provider is using a cutting-edge platform which waits until the
entire site has loaded before it runs the chat program. This ensures that the
plugin will not slow down a site’s load time. As customers go increasingly
mobile, it’s also key that the live chat operator offers mobile capabilities
in order to maximize the channel’s potential and customer satisfaction.
Additionally, integrating live chat software creates a customer expectation
of service availability and capability. Investing in highly qualified agents
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2016 Consumer and Service Report
and making it clear when live chat is and isn’t available are considerations
that a business must keep in mind.
There are many directions that the live chat feature can go in the
future, but one that stands out in particular is through the integration of
mobile messaging apps. In Japan, South Korea and China, retailers are
already using the most popular messaging apps such as WeChat to offer
customized pages through which customers can browse, shop, and chat
with a representative all in one place.
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33% of respondents report that their social media
enquiries go completely unanswered
Outside of the Asian market, Facebook is getting into the live
chat game with its new Facebook Messenger for Business. The future of
live chat and messaging support may also lie in the hands of service bots.
Facebook, for example, is already developing sophisticated bots that can
handle customer queries nearly as well as a human. The technology is
not quite there yet, but this capability is sure to become finely tuned in
the not too distant future and may well be an important segment of the
service industry soon. Although this technology is quickly evolving, when
it comes to closing a sale, companies should still strongly consider having
the final communication handled by a human agent who can relate to the
customer in a creative and compassionate manner.
SOCIAL MEDIA
Even though Facebook is entering the customer service industry with its
messenger and other development projects, social media overall earns low
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2016 Consumer and Service Report
levels of use and satisfaction among consumers. People are used to social
media actions resulting in immediate responses, and most companies are
unable to live up to this expectation as of now. While NM Incite reports
that 47% of American social media users have tried to use social media
in order to contact customer support, a North Ridge report shows that
fully 33% of respondents report that their social media enquiries go
completely unanswered. Consider that meanwhile, customers expect
rapid responses over social media, with 42% of American consumers
expecting a response within an hour and fully 32% of people expecting
a response within 30 minutes according to Convince & Convert’s data.
The expectation of instant acknowledgement and rapid responses often
lead to disappointment for social media users who try to reach business’
customer service via channels like Facebook and Twitter.
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live chat still remains most popular among small and
medium sized businesses
While brands have been differentiating between their use of
social media for promotion efforts and other channels for customer
service, consumers do not take this same outlook.
When customers reach out for assistance via social media and
receive no response or an ineffective response, they have the same
experience of a negative interaction as they would had they been
dissatisfied with a company’s phone or email service.
This can have repercussions for a business’ social media marketing
as the North Ridge study shows that more than half of consumers plan
on either cutting back on their contact with brands via social media or
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2016 Consumer and Service Report
Social Media Platform US
Customers Are Most
Likely To Use For
Customer Service (2015)
29%
Facebook
13%
Twitter
12%
YouTube
not contacting brands at all. Companies that want to improve their social
media support should focus their efforts on Facebook, as NM Incite
shows that 29% of users will turn to Facebook for customer service while
only 13% and 12% will use Twitter or YoutTube respectively.
THE IMPORTANCE OF STELLAR
CUSTOMER SERVICE FOR LUXURY RETAILERS
Although the data shows that companies of all sizes and types stand to
gain by providing great customer service and that poor customer service
experiences can have a negative effect, research shows that luxury retailers
have the most to lose when customers are dissatisfied. Luxury customers
are used to receiving superior customer service and because of the high
cost of purchasing luxury products they expect better of the companies
they buy from. As mentioned before, 48% of luxury customers who have
a negative customer support experience demand an apology, refund or
incentive in order to continue shopping with that brand. On top of that,
another 13% of these customers would not only refuse to accept any
attempts at making amends, but they would not continue shopping with
that brand at all in the future. Even as many consumers are increasingly
Source: Business Insider & NM incite
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2016 Consumer and Service Report
concerned with getting the best value, with discretionary spending for
the average consumer falling 1% between 2014ˉ2015, affluent consumers
are spending more than ever before. According to YouGov, discretionary
spending among those who earn $120,000 a year or more is expected
to rise 6.6% in 2016. This would bring their discretionary spending to a
whopping $406 billion. Among the top 1% of Americans, discretionary
spending is expected to rise 10%, making the luxury market an important
segment for retailers. More importantly, affluent shoppers do not restrict
themselves to purchasing from luxury retailers, so all retailers need to be
prepared to provide the level of service that these customers expect in
order to retain their business.
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social media overall earns low levels of use and
satisfaction among consumers
In fact, more affluent consumers in the US have purchased
something on Amazon in the last year than the average consumer – 66%
versus 60%. These customers don’t only expect great service, they expect
personalized service. However, as of yet only Louis Vuitton offers shoppers
personalized services via phone, email and live chat. Other luxury retailers,
like Tiffany and Cartier offer only phone and email services, while still others
like Burberry and Ralph Lauren offer no personalized service option at all.
SO WHAT DOES
ALL THIS MEAN?
Online shopping may be rising in popularity, but it still requires a leap of
faith on the customer’s part and leaves room for buyer’s remorse which
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2016 Consumer and Service Report
makes good customer service more important for online retailers. As
mentioned before, Microsoft’s research shows that 60% of consumers in
the US will spend more with a company that provides them with excellent
customer service. This means that providing great customer service is an
important investment for companies of all sizes but especially for luxury
brands whose customers have higher expectations than the average
consumer.
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companies must invest in manning their live chat with
quality agents
Customers value efficient and quick service for both urgent and
non-urgent issues alike, but their patience levels are much higher for nonurgent issues and via platforms like email where some delay is the norm.
On platforms such as social media though or even the phone, where people
are used to immediacy in all interactions, delays can leave a customer with
negative feelings about a brand.
For companies looking to improve their service, extra attention
should be paid to providing quality service and increasing responsiveness.
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2016 Consumer and Service Report
To Sum Up:
A positive customer service experience can cause
a shopper to make a larger purchase than they
might have.
At the same time, a negative service experience
can cause them to walk away from the purchase
altogether.
Telephone is the most popular way for customers
to reach out for support, followed closely by
email with live chat rising as an increasingly
popular channel.
Customers who speak with a live chat agent
during the shopping process make purchases
100ˉ300% larger than average.
If a live chat feature is offered, it must be
manned by agents who are experts on the
company’s products and services.
Customers value speed and quality of service.
Luxury customers value personalized service and
have higher service expectations overall.
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2016 Consumer and Service Report
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