Can Live Chat Rescue UK Firms from the Customer Service Doldrums? A survey exploring attitudes towards different customer service platforms and service industries from a UK consumer and business perspective An independent survey of more than 2000 consumers and businesses across Britain shows that most companies, while happy to take their customer s cash for products and services over the Internet, are failing to deliver an online customer service experience to match. The survey found that today s customers want to connect fast, and engage live with a human customer service representative at their bank, retailer and other online businesses. A marked preference toward live chat among the younger professional generation suggests UK businesses are missing an opportunity to rescue their customer service from the doldrums. 1. Can Live Chat Rescue UK Firms from the Customer Service Doldrums?
Executive Overview A Very British Customer Service Issue The UK has a long-standing association with poor customer service. It has provided a rich seam for popular sitcoms, giving us characters such as Basil Fawlty, Albert Arkwright or Julie Walters waitress. According to the World Economic Forum, the UK ranks a lowly 34th in the world for customer service, putting it behind countries such as Lithuania. The study finds that while 80% of UK employees believe they provide a superior service, just 8% of customers agree. 1 This disparity demonstrates the stark realities of British customer service and shows a clear disconnect between how businesses and consumers perceive the level of assistance being provided. The Online Revolution Britain is a huge adopter of online shopping and spends more per capita than any other country (except Poland) on goods and services over the Internet. 2 UK businesses have been quick to embrace e-commerce to drive profits; the sector is currently worth 121 billion and growing. 3 But the growth in internet sales is also forcing businesses to update the level of service they offer to consumers online. Making people wait on hold, fill in online forms, answer emails or write letters doesn t work with simple customer service questions for an online store. Are You (Still) Being Served? Poor customer service, particularly online, causes consumers to turn their backs on organisations that do not provide a good level of support. A recent survey by Econsultancy found UK companies are losing the equivalent of 24% of their online revenues due to poor online customer experience. 4 The situation needs to be addressed urgently if UK businesses are to thrive in a difficult economic environment. Customers in today s market have a host of companies to choose from, and they can change allegiance at the click of a mouse. This makes holding on to customers harder and UK businesses are vulnerable because many are failing to deliver an adequate level of online customer service. What is live chat? Live chat is hosted software used by companies to connect with users directly on their website, email or social media page. When someone browsing a company s website has a question, they can select the chat button and be greeted by a pop-up window. The customer can hold an instant text (or video) conversation with a customer service representative. Some sites even have proactive chat windows, which greet a customer asking if they need help. If the person has contacted the company before, their chat history is automatically available to the customer service representative to help resolve issues more quickly. 1 Telegraph, 25th February 2012, Think Tank UK will struggle to win gold in customer service during the London 2012 Olympics 2 Guardian, 2nd December 2010, Britons well ahead of the pack in adopting new technology, says Ofcom 3 BBC, 19th March 2012, UK is the most internet-based major economy 4 Econsultancy, 2nd June 2011, UK companies losing equivalent of 14bn a year due to poor online customer experiences 1. Can Live Chat Rescue UK Firms from the Customer Service Doldrums?
Survey Objective & Methodology Netop carried out the following research project to gauge public perception about the different customer service platforms available. The research sought to determine which customer service channels were offered in a primary support function. Are email, overseas call centres and letters really still the best companies can offer? With so much of the UK population now using the Internet, have businesses responded by embracing new online customer service technologies, such as live chat? Research Methodology The following survey data was collected via an online consumer omnibus survey completed by a nationally representative sample of 1,000 businesses and 1,000 consumers aged 18-65+ from across the United Kingdom. The survey was prepared on behalf of Dynamic Markets by ICM Research and conducted in January 2012. The identity of the 2,000 respondents will remain confidential, in accordance with the MRS Code of Conduct. The Netop name was not revealed during the interview to ensure the data remained unbiased. Key Findings The research finds a number of worrying trends for companies reliant on traditional offline customer service tools. 1: Britain s love/hate relationship with traditional support channels The telephone remains the most used customer service channel in the UK; 75% of us have used it to contact companies with questions in the last year. However, almost the same number of respondents (73%) said being held in a long phone queue was their biggest pet hate. 80 70 60 50 40 30 20 10 0 52% 57% 73% Second in popularity after the telephone today, email was used by 71% to attempt to obtain customer service in the past year. The lack of real time response causes frustration with this service channel however, as 61% of respondents identified securing a real time response for their questions as one of the top benefits of live chat. Other benefits cited for online chat over the telephone included avoiding being routed between different people or departments (57%), securing a clear response without accents getting in the way (54%) and not having to listen to hold music (52%). More than half (51%) are also keen to chat online with someone in customer service from the comfort of their own home, while 43% liked the ability chat provides to be directed to a technical or self-help article with a simple click of a button. Benefits of live chat over traditional phone support: No more phone hold music (52%) Avoid being routed between departments (57%) No more long phone queues (73%) Conclusion: Telephone and email support are the default options for for most companies today, but suffer from a significant number of failings in the eyes of the UK public. Given the opportunity, 88% of those polled saw a benefit to communicating with a company using online chat rather than through traditional support channels. 2. Can Live Chat Rescue UK Firms from the Customer Service Doldrums?
2: Demand for Live Chat Is High, but UK Businesses Are Ignoring the Opportunity Although a relatively new method of customer interaction, the research showed live chat was already preferred by over one in five consumers (21%) as their number one communications choice. 37% The research also found consumers were more favourable to online customer service (21%) than in-person customer service (17%). Despite the limited availability of live chat in the UK, it was used by more than a quarter (28%) of those surveyed last year, suggesting that wherever a live chat option is available on a website, it will be used heavily. 31% 23% 27% Employees also appeared to have a positive view of the benefits that live chat could bring to their company: 37% said it would provide a better service experience 31% said it would lead to happier customers 27% said it would create to a closer customer relationship 23% said it would improve customer loyalty The findings should make interesting reading for the vast majority (93%) of UK businesses that are not using live chat to enhance their customer service experience. Especially at a time when so many consumers raising a question with customer service found themselves queuing on the phone (75%) or waiting for a response to an email (71%). A surprisingly high number (22%) even resorted to letter writing, a method only 1% of consumers favour, to make their point. Benefits of live chat for company: 37% said it would provide a better service experience 31% said it would lead to happier customers 27% said it would create to a closer customer relationship 23% said it would improve customer loyalty Conclusion: By providing a more user-friendly and immediate service, live chat looks set to make a significant impression in the future. A marked preference towards live chat, rather than having a physical meeting, further suggests the face of UK online customer service needs to evolve fast. A lot of people don t know what live chat is, but those that do, use it disproportionately when it is available. 3: UK firms are overly optimistic about how their service is perceived When asked which industry sector was the best in terms of how it deals with customer requests, there was a very clear disconnect between how organisations perceived their customer service, and what the public thinks. According to the survey, employees in every UK industry dramatically overstated the success they believed their customer service channel was having, often rating their own industry as the best in customer service, when customer perception was quite different. Most more than doubled the perceived approval of customer service efforts compared to the actual responses attained by the survey. Fig 1 illustrates these findings in full: 3. Can Live Chat Rescue UK Firms from the Customer Service Doldrums?
Fig 1: Which is the best industry sector in terms of how it deals with customer requests? Sector s selfperception of its service levels Customer perception of that sector s actual service levels % difference Retail 40% 20% 100% Hotels & leisure 28% 16% 75% Financial services 21% 7% 200% Public sector 12% 6% 100% Utilities and telecoms 10% 4% 150% Manufacturing 10% 3% 233% Transport 5% 2% 150% Construction 4% 1% 300% On average, UK industries were over 160% out of sync with their customers perception of them. While the hotel industry seems the least delusional in this regard, it still claimed a customer service rating 75% higher than the value given by its customers. The finance sector, which makes frequent, public statements on the strength of its customer service, and was well represented in this survey, appeared worryingly out of touch. Conclusion: While pride in one s industry is admirable, it can impede acknowledging and correcting shortcomings in customer service. Those industries experiencing day-to-day customer contact, such as retail, leisure and the public sector, seem to be the most aligned with the public on how their customer service is perceived. However, every industry in the survey still greatly overestimated the success of their customer service. The finance sector appears to be the industry in particular need of review. In an economic climate where businesses are losing revenue and customers, no company can afford to take such a blinkered approach towards the feedback it is receiving. 4: Customer Service Habits Change As We Grow Older The survey found a marked fluctuation in the use of email according to age group. Notably, 18-24 year olds were 27% less likely to use email than other age groups. In fact every generation, including the over 65s, used email more frequently than the youth of today. This disillusion with email is unlikely to be due to time constraints, as the findings suggest the 18-24 age group has a great deal of time on its hands. With a significant proportion of this group unlikely to be in full-time work, nearly half (47%) of 18-24s made a face-to-face store visit last year, by far the highest percentage of any age group. This tendency changes, however, upon reaching working age. In the 25-34 age bracket, those selecting face-to-face as their preferred method of contact drops by 50%. The number preferring to use email jumps by 24%, reflecting perhaps an increased reliance on this channel for work purposes. Email Use For Customer Service Lowest Among Youngest Generation: 18-24 25-34 34-44 45-54 55-64 65+ 64% 75% 72% 77% 72% 67% 0 10 20 30 40 50 60 70 80 4. Can Live Chat Rescue UK Firms from the Customer Service Doldrums?
In this younger professional generation, the demand for live chat technology stands out. The 25-34 year old group is 36% more likely to use live chat, and 16% more likely to favour it over telephone support. What of those entering retirement age? It appears that those over the age of 65, inspired less by Alan Sugar and more by Victor Meldrew, are rediscovering the art of letter writing. Although clearly in decline in almost every age group, particularly today s youth, 31% of the 65+ group have sent a letter to a company in the past twelve months. Conclusion: There is a clear suggestion email support could decline in the future, with so few of the younger generation using it. This implies that things are only going to get worse for companies relying on phone and email. In addition, it appears clear that younger generations are strongly in favour of instant online service options, such as live chat, to answer their customer service queries. 5: The UK s Top Earners Are More Likely To Be Online When examining the social standing of the survey respondents, it appears the nation s highest earners are also those most likely to be online. According to the results, those in either the upper or middle classes (grade AB) were the most likely to use email, with 83% having relied on this channel in the past year. These top earners were also 38% more likely to use email than the working class, or those dependent on the state (grade DE), and 29% more likely to use live chat. In addition, the richer the respondent, the higher the chances of them raising a query will be. In total, 96% of grade AB respondents contacted a company with a question in the last year. By contrast, 87% of grade DE respondents made contact, the lowest percentage of any group in the survey. Top Earners Are Most Likely to Contact Companies Online Email Chat AB 83% 31% C1 75% 32% C2 63% 25% DE 60% 24% Conclusion: The research shows a clear correlation between wealth, time spent online and the likelihood of raising a customer service issue. So if those on a higher income with more to spend are the most likely to use online channels, this should be a key focus for any business looking to maintain relations with its most lucrative customer base. With customer service also in higher demand by the rich, online support channels are potentially a key means for driving growth moving forward. 5. Can Live Chat Rescue UK Firms from the Customer Service Doldrums?
Summary There is a major disconnect with how UK firms perceive their own customer service levels, and the way their customers rate them. There is clearly work to be done in narrowing the gap between this perception and reality. Customers generally agree that live chat has the potential to transform the online customer service experience and bring them closer to the brands that they use and trust. But it s an option few businesses offer today, forcing them to resort to phone and email, despite the shortcomings of both these channels. This trend needs to change if UK firms are to maintain close relations with their customers. In this respect, live chat needs to become an integral part of an holistic customer service experience. Offering live chat adds to this experience and businesses that embrace it sooner should be in a stronger position to retain existing, and perhaps win over new, customers. It s a sign of the times when people say they would rather engage via live chat than meet their bank manager, retailer or travel agent in person. But if this is what the customer wants, this should be what the customer gets. Live chat is not a solution looking for a problem; it s an evolutionary step in online customer communication and brand loyalty. Netop Live Guide This report was sponsored by Netop, a leader in the field of live chat. The company s Netop Live Guide live chat software offers businesses a wide range of personal communication features on their websites including two-way text, audio and video chat. With Live Guide your company can easily engage and assist visitors to your website. Live Guide s full feature set, advanced reporting capability and industry-leading operator interface are designed for usability and efficiency, resulting in increased conversion rates, lower service costs and improved customer satisfaction. For more information please visit: Early adopters of live chat technology are already demonstrating a range of customer service benefits. Organisations in every sector should think about addressing their online customer service failings sooner rather than later, to ensure they don t lose out to those that are embracing steps to provide better levels of service. Commissioned by Netop - findings published March 2012 6. Can Live Chat Rescue UK Firms from the Customer Service Doldrums?