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Poor Customer Service Plagues Technology Companies

Accenture Study Finds Three-Quarters of Customers Receiving “Average” Customer Service Plan to Defect; Self-Service Capabilities Not Winning over Customers

Many consumer technology companies are alienating customers with “average” customer service and risk losing three-quarters (73 percent) of them to competitors, according to Accenture (NYSE: ACN) research released today.

The research, based on interviews with senior executives at large consumer-technology companies around the world and a survey of 1,200 technology consumers in North America, Europe and Asia, found wide-reaching disparities in perception of customer service between technology companies and their customers.

“Too many of these companies fail to realize the dire long-term repercussions of not making the proper investments in customer service, including missing out on millions of dollars in business opportunities,” said Brett Anderson, managing director for Customer Relationship Management in Accenture’s Communications & High Tech Practice. “This is a wake-up call that customer service should no longer be relegated to a mere instrument for extracting costs out of the business. Instead, this service should be a powerful and crucial investment target for accelerating full-throttle toward delivering high performance.”

The research found that more than three-quarters (81 percent) of customers who rated their service satisfaction as “below average” said they will purchase from a different supplier the next time. Many companies perceive themselves to be providing much better service than their customers say they are receiving. Although three-quarters (75 percent) of executives said their companies’ provide “above average” customer care, more than half (58 percent) of consumers rated their satisfaction with customer service as average or below average.

“With so many technology products on a natural path to commoditization, technology companies need to use customer service to differentiate themselves from competitors,” Anderson said.

When consumers rate their service satisfaction as merely “average,” the likelihood of their buying again from that same company falls by almost half from 51 percent to 27 percent. Moreover, because nearly half (48 percent) of consumers surveyed said they share their negative customer-service experiences with friends and family, technology companies risk losing many more customers than just those at the receiving end of poor customer service.

“Sharing negative customer-service experiences, both via word of mouth and particularly through the Internet, has become a powerful weapon in the hands of consumers to damage companies that provide mediocre or bad customer service,” Anderson said. “Accenture has never seen a closer correlation between customer service and consumer loyalty, or the influence that a single customer’s opinion can have on the masses.”

Accenture’s research also exposed several additional areas of poor customer service and consumer dissatisfaction. Among the findings:

  • More than four in 10 customers surveyed (42 percent) said they had to access customer-service channels multiple times to resolve their problems.
  • More than six in 10 customers surveyed (61 percent) said they believe that technology has not improved customer service.
  • The vast majority of consumers–78 percent–said the service they receive is “at or below” the level competitors offer.
  • Companies are wasting millions of dollars on customer-service initiatives that customers don’t view as important, particularly self-service capabilities.

To access the research findings, go to http://www.accenture.com/customersupportstudy.

About the Research
On behalf of Accenture, BPRI Group interviewed in person or via phone executives at the vice president level and above at 35 global consumer technology companies, each with at least $1 billion in annual revenue, in Asia, North America, Europe between August and November 2006. The survey of customers of consumer technology companies was fielded between January and March 2007 by the Lightspeed Consumer Panel and included consumers in the United States, United Kingdom, Germany, France, Italy and Japan.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 152,000 people in 49 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home page is http://www.accenture.com.

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