Mind the customer service gap: Australia

The numbers from the ServiceNow 2025 Customer Experience Report are in, and they don’t add up. Brands may profess that delivering great customer service is their priority, but their employees and customers say otherwise.

Over the past year, Australians spent 123 million hours on hold, an increase of 5% over the previous year. Consumers told us it takes more than five days on average to resolve an issue, but customer service agents say it takes just 30 minutes. That’s a significant customer service gap.

Consumers are complaining more, waiting longer, and wasting time with digital tools they can’t use. But the view from frontline employees is at odds with this: Customer service agents believe service is improving—despite their increased workloads, fears of job loss, and process chaos.

The potential financial cost of this gap to the economy is rising each year, with lost productivity estimated to be in the billions, according to our research. There’s also mounting human toll: Just over half of Australians say being left on hold negatively affects their well-being when dealing with government services.

Our research identifies three service gaps between consumer expectations and customer service reality that Australian leaders need to address.

Service gap No. 1: The great disconnect

Agents love serving customers but are spending only one day per week doing what they signed up for, according to our study. Productivity is low due to siloed teams, disparate systems, and disconnected data that stymies the flow of work.

On average, customer service employees spend 15% of their time on administration and more than 10% of their time waiting on answers from other teams. Worryingly, 63% of workers say company investment in staff is waning, and 41% say spending on training is decreasing.

As a result of these hurdles, Australia's state of customer service is declining year over year. Technology-resistant organizations resort to adding headcount when service goes wrong, multiplying confusion and bottlenecks rather than fixing the root cause.

Other organizations are investing in digital point solutions rather than connecting tools across departments. Most businesses fail to focus on upskilling their staff to use and manage digital systems to improve service.

Employees are bearing the brunt of angry customers and wasting 80% of their time on low-value tasks, according to our research. Frustration on the front line is causing high attrition, burnout, and demand for more mental health support.

People assume customer service agents are the reason for poor service. In reality, workers are motivated to solve issues, but their organizations’ technology and systems prevent them from doing so. Deploying cross-functional tools that take pressure off the workforce can boost customer loyalty.

Service gap No. 2: Resolve or refund

Most consumers have experienced the frustration of repeating the same request to multiple agents or being bounced between teams that have no idea about what's happening. Fed up Aussies are demanding better service in ways that will impact the bottom line.

Short-term cost cutting is undermining customer experience, and organizations may be underestimating the potential loss. While 32% of service agents say their customers are demanding refunds when they can’t get their issues resolved, a whopping 80% of Aussies say they’ll request a refund or compensation for slow or poor service this year.

Millennials, Australia's largest demographic, are the most likely to switch brands—after just three days. Year over year, Aussies are doubling down on prompt resolution as their No. 1 priority, and they want speedy service around the clock.

Our research signals a burgeoning exodus to competitors this year if consumers have another avenue available to meet their needs.

Service gap No. 3: Hype vs. reality

Aussies are ready to imagine a world where simple requests are done automatically, autonomously, and instantly. Openness to using AI is up, and fear about AI is down, according to our study.

Despite this, we found a 37% decline in chatbot trust over the last 12 months. Only 42% of consumers say AI has made good customer service experiences more accessible, while 84% agree that customer service has become less personal as a result of AI.

Herein lies the risk for businesses: When tools aren’t effective or employees aren't trained to use them, consumer trust erosion is amplified. Tellingly, 90% of employees say their organizations have implemented solutions that don’t work with their existing systems or tools.

If your digital service upgrades aren’t practical and instantly usable, you shouldn’t be implementing them.

These missteps are creating a culture of caution when it comes to AI adoption. Consumers want better self-service and intelligent apps. Businesses need to eliminate their silos and do their part. It took one major bank in Australia more than a year to approve an AI use case—but just six days to turn it on.

With only one in 10 organizations currently offering the digital tools their employees and customers want and need, the opportunity for improvement is immense. The quicker businesses can convert information into action, the faster they can gain across every metric.

Take Southern Cross Health Insurance, for example. The organization saw a nearly 30% increase in customer satisfaction by turning on AI tools to help its employees.

Leaders can start closing the customer service gap today by using AI to connect teams, automate processes, boost productivity, and reduce costs.

Gain more insights in our 2025 Customer Experience Report.