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The Impact of Poor Customer Experience on Retailers – Call Centre Disconnect


I read an infographic the other day, called ‘The bottom line cost of bad customer service’, which inspired this article. I would highly recommend reading the infographic for yourself, but let me share some of the most shocking highlights with you:

Expectations are higher than ever:

  • 60% of customers have a higher expectation for customer service now than they did just 1 year ago

Unhappy customers are quick to leave:

  • 51% of customers said they would only try to reach support once
  • 78% have abandoned a transaction, because of poor experience
  • 89% have stopped doing business because of poor experience
  • 44% have switched to a competitor because of a poor experience
  • Customers are 4 times more likely to buy from a competitor if there is a problem with service

Top reasons why customers switch to a competitor:

  • 53% feel unappreciated
  • 42% leave, because of rude staff
  • 29% leave due to poorly trained staff
  • 25% leave, because they have been kept on hold

Once a customer leaves, they rarely come back:

  • 39% of customers avoid vendors for 2+ years after a bad experience
  • 58% will never use the company again

High-value customers are usually the first to go:

  • 51% B2B clients
  • 54% Gen Xers
  • 79% high-income customers

It is 6 to 7 times more expensive to acquire a new customer than it is to keep a current one:

  • $338.5 billion is lost globally due to poor customer service

With this as our point of departure, I would like to delve into what this means for retailers and how to address these issues.

Retailers are more focused on ‘brick and mortar’ vs. contact centres or online. Consequently, retailers perceive contact centres as an expense, so they do it as cheap as possible. When we look at today’s stats the switching cost is just too high for retailers who follow this ‘cheap’ operating model,– they just will not survive.

When I think of the ‘cheap’ operating model, I think of low-cost offshore locations, where there is a complete disconnect with the consumer. This disconnect can seriously harm your business. It is so important to make call centre staff part of your culture. Offshoring can be successful in achieving your customer service goals and save costs, but you need to have the right training, technology and offshore location in place to make this happen.

Let us take a closer look at these success factors.

Training

When it comes to training, this is not the time to cut costs. Call centre staff need to be 100% aligned to your core brand values – even in the way they answer the phone or end a call. Your outsourcing provider should know this.  A provider that takes customer experience seriously will demonstrate their training capabilities with soft skill programmes that compliment your technical training. Your involvement in the training process is also crucial in preventing any disconnect that could harm your business. Offshoring is a cost cutting strategy and always will be, but training is not the way to do it.

Technology

When we look at the challenges retailers face today, we see on-going disruption from the next wave of digital technologies. In an industry with rising cost pressures such as staff costs, fuel prices and commodity prices to name a few, retailers need to prioritise investment in technologies. Many retailers use offshoring to accelerate their efforts in the technology space. The strategy is sound because it allows retailers to remain competitive without major upfront investment. Offshoring, however, does not have to equate to bad customer service. There are cost effective locations and providers that can support your needs, without compromising on your brand integrity. That is where the next success factor, namely the right offshore location, comes in.

Offshore location

Since outsourcing first became popular, locations such as the Philippines and India have dominated the market with promises of low rates and reduced operational costs. However, there is no denying the negative publicity that plagues these low-cost offshoring locations when it comes to customer disconnect. When retailers tend to focus on a ‘cheap operating model’ for their call centre as their sole motivation when it comes to offshoring, it could lead to problems down the road. When we look at the cost of bad customer service, it is clear retailers should consider customer experience as well as price. The fact is there are alternative low-cost offshoring locations that offer specific quantitative and qualitative necessities. From this balanced perspective, offshoring can be lucrative. It can ensure long-term success and achieve short-term cost saving objectives.

I believe customer experience is one of the main battlegrounds for retailers this year and for many years to come. The challenge is to develop a retail service model that treats each customer as an individual, which maintains satisfaction and loyalty levels. Many retailers are doing this well in store, but this retail service model needs to extend and encompass the whole customer experience including online and call centres. In these tough times, customers are more and more likely to reject bad service when a competitor can offer the same products and price without the hassle. In my opinion, retailers can no longer view customer service as an option. The time to act is now.

If you found this article interesting, you might be interested in what one of our customers has to say or experience a virtual tour of one of our centres.

Mindpearl Fiji Virtual Tour

A pioneering move by William Pattison, our CEO, saw one of the first international outsourced call centres in Suva, Fiji Islands open in 2009. This BPO location offers a high quality and cost efficient English language alternative to offshore locations such as India and the Philippines. Fiji also boasts a rich expat community, which adds to its value proposition as Fijian, Hindi, Spanish, French, Italian, Dutch, German, Swiss German, Portuguese and Tamil to name a few, are offered in Fiji. Today, Mindpearl Suva houses 14 International clients across numerous industry verticals. Fiji also won the Offshoring Destination of the Year 2014 by the European Outsourcing Association (EOA) and has been a finalist in both the EOA and NOA UK awards in 2015 and 2016. Click here to experience Mindpearl Fiji for yourself.

Mindpearl South Africa Virtual Tour

Cape Town has a skilled workforce with excellent language skills. Cape Town offers Mindpearl access to English speakers and a broad range of European language resources. Cape Town is a modern city with an advanced technology and telephony infrastructure that is robust and resilient. South Africa has won both the National and European Outsourcing Association Offshoring Destination of the Year awards for 2012 and 2013 respectively. South Africa also won the National Outsourcing Association Offshoring Destination of the Year award in 2016. Click here to experience Mindpearl South Africa for yourself.

Mindpearl and Harmoney – An Outsourcing Success Story

Thinking of outsourcing? Mindpearl is the simple choice for all your outsourcing needs, but don’t take our word for it. Click here to hear what our clients have to say. Brad Hagstom, joint CEO of peer-to-peer lending platform Harmoney delivers a keynote on the reasons he decided to offshore to Mindpearl Fiji.

Author: Alan Graham | 31 March 2017
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