In March 2024, the UK tax agency HMRC announced that it was closing its customer support phone lines for self-assessment tax queries. The response was as swift as it was negative. Following the public outcry, the lines were soon reinstated and plans to shelve them for six months every year put on permanent hold.
HMRC’s proposal, however, was not to withdraw customer support altogether, but rather to use other digital channels to provide taxpayers with the help they needed. The plan’s comprehensive rejection by the public, and as a result the government, speaks to a wider dissatisfaction with the experiences people receive from a wide range of businesses and organisations.
The UK public believes that, generally speaking, service from all types of businesses is getting worse. According to the UK Customer Satisfaction Index, compiled annually by the Institute of Customer Service (ICS), in each of the 13 sectors the Index covers, the scores for customer satisfaction are lower than a year ago. Satisfaction with some sectors – utilities, transport and insurance – declined at twice the rate of others. And this negative trend is not restricted to the UK. In the US, the picture is much the same. Customer satisfaction levels there have declined significantly over the past few years and are still below their last peak recorded in 2006..
There’s a huge price to pay. The ICS calculates that the decline in satisfaction in just one year will cost UK businesses more than £7 billion. The survey also found that UK businesses’ people were spending more time in 2023 dealing with customer problems than during the previous year. It estimates that the increase in time spent dealing with problems rather than on value-adding activities represents up to more than £11 billion in lost output across the UK economy.
The ICS findings are echoed to some extent by ServiceNow’s own recent research. This revealed that consumers are frustrated by technology that makes their interactions more complex rather than easier as intended. As a result, nearly 80% of customers say that they’ll carry out their own research online to discover the steps they can take to avoid using a digital service and instead speak to a live agent as quickly as possible.
On the flipside, companies that get their customer experience right are reaping the rewards. ICS analysis suggests that firms with higher-than-average ratings for customer service generate 114% more revenue per employee than their poorer-performing counterparts. More than a quarter (28%) of consumers who rated an organisation a 9 or a 10 (out of 10) for service said they would look to buy more from that business.
The consequences of poor service are clear, as are the benefits of doing it well. Given the stakes, then, why are so many businesses apparently failing to meet customer expectations? The answer may lie in the very technology that so many customers take such a dim view of today. Virtual agents, chatbots, self-service portals and other digital channels all have a useful role to play. But it’s how they are presented to the customer and connected by relevant data that really makes a difference. Paul Hardy, a strategist with ServiceNow’s Chief Innovation Office explains why a specific technology such as chatbot is not going to suddenly change how customers feel: “A chatbot will not solve everything. Some people still want to call up. Some people want to speak to a human. Some people just want send a message to make sure that something’s been done. We've really got to provide ways that meet people where they are and how they want to connect. Experience has to be hyper-personalised around each customer’s expectations.”
If the experience offered by technology is poor, it creates a disproportionately negative impact on a customer’s willingness to transact with the organisation in question. The ICS research found that 35% of customers say they’ll go back to an organisation following a positive use of technology. But 45% say poor use of technology has made them avoid repeat business with an organisation.
The proliferation of channels has also led in many cases to increased complexity. The consumer can now typically reach a business in many different ways. ServiceNow’s research shows that, for certain tasks, particular channels are the clear favourites. Broadly speaking, the more general the customer enquiry is, the greater the likelihood that they’ll look to options such as chatbots, search and self-service portals. Once there’s a specific problem to solve, the preference is to speak with an agent, and to do that as quickly as possible. Only 20% of respondents to ServiceNow’s research said a good chatbot service was very important. Three times that proportion rated other aspects of service as very important, such as customer agent response times (63%) and an agent’s ability to resolve problems easily (69%).
But simply responding to the apparent demand for higher-touch, human-led service may not be the best approach for businesses to take as they seek to improve customer service while keeping a lid on costs. Customers are not looking for human support for all their queries. They simply want the best possible solution for the task at hand. Approaches that have been guided by the choice between cost on the one hand and a great experience on the other have, in fact, created an unnecessary binary dynamic.
There does not have to be a choice between great experience and lower cost. When addressed in the right way, businesses can provide their customers with excellent experiences that are also cost effective. But to achieve that, they need to think about customer experience as part of a continuum of processes, tasks and transactions rather than a discrete, standalone function. So instead of focusing on introducing more digital channels – from WhatsApp to video chat – that add to complexity, the key to elevating customer experience is to make every interaction a customer has count – or even eliminating the need for a customer to get in touch at all.
Delivering that requires intelligently linking quality data and processes together, connecting all relevant functions – from finance to field service – with a single, shared view of every customer. Andy Venables, CTO of customer experience specialist POPX emphasizes the importance of high quality data, “If the data flowing into the customer service platform isn't very good, what's flowing out that goes to the service platform doesn't really have much of a chance of achieving the required level of excellence. It’s therefore really important to know what data you have, know where your data gaps are up front, and then play to your strengths around those.”
Automation – and increasingly generative AI – can cut across departmental silos, eliminate the need for manual interventions and free-up agents to focus on only the most complex and sensitive cases. In fact, with intelligence and automation flowing across a platform and digitally connecting every relevant system, many issues can be proactively addressed without a customer ever having to make contact. And that’s not only good news for the customer, it’s also a great result for the bottom line.