Following on from my previous blog, in which I discussed the impact that customer service has on driving customer commitment, I wanted to share some additional analysis that we have recently conducted that further validates the importance of customer service.
Given the slow growth that most mature economies are currently experiencing, and as organisations look for ways to differentiate themselves, the role of customer service as a key business lever is set to become more and more important. There is much analysis and commentary that predicts that the impact of traditional marketing levers will soften.
In light of this trend, we set out to further understand and measure the impact customer service has on driving customer commitment. Earlier this year we conducted a global Customer Engagement study in which we asked consumers to rate a recent customer service experience. The study covered five industry verticals (Finance & Business, Telco, Retail, Travel & Tourism and Healthcare) and over ten channels including, agent phone, auto phone, email and online. In this study we asked consumers to rate their service experience based on three measures, Satisfaction, Emotion (Happiness) and Effort. We also asked their likelihood to recommend the organisation they had interacted with as a measure of commitment.
Using linear regression analysis we were able to measure the level of influence the customer service measures (Satisfaction, Happiness and Effort) had on explaining the variance observed with (Recommendation).
The results of this analysis amongst Australian consumers are shown below:
Click to enlarge
Overall, customer service explains between 44% and 67% of customer commitment (Recommendation). Customer service experience has the biggest impact within the Finance and Business sector and a lower level of influence (but still significant) in the Hospitality / Tourism industry. So why would this be? Within the Finance and Business industry the role of product, interest rates and brand as a means of differentiation is potentially becoming less and less important. A home loan, is a home loan is a home loan. So how do customers decide which provider to go with? Through their interactions and experiences in dealing with the organisation. In comparison within the Hospitality / Tourism category, the role of the product, in this case say the destination, plays a bigger role in driving commitment.
It is again made clear through this analysis that customer service is a significant driver of customer commitment. What organisations need to better understand is how this relationship between customer service and commitment manifests itself within their own ecosystem as each organisation will use different activities to drive commitment.
Look out for more analysis in future blogs as we delve into differences by country as well as demographic.