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Study Finds the Cost of Poor Customer Support Continues to Rise

By Tracey E. Schelmetic September 18, 2023

What’s the cost of bad customer service? Many companies have likely asked themselves this question in an effort to determine how much to spend – or not spend – on improving the quality of customer support.

It’s a valid question. Budgets are not unlimited, and companies will often attempt to find places where their capital expenditures will generate the most sales and therefore the biggest return on investment.

A new study commissioned by generative AI customer service platform found that customers’ expectations continue to rise, and the costs for delivering sub-par customer support are also on the rise. The survey results, based on responses from 1,000 nationally dispersed consumers in the U.S., underscores the primary reasons customer satisfaction has plummeted to a 17-year low.

Some of the most striking revelations uncovered by the study include:

  • 64% of respondents indicated they will not do business with a company after a poor customer service encounter, contrasting sharply with the 2% who said it’s unimportant.
  • 92% of respondents said they are more inclined to shop from brands offering real-time, tailored customer service, with custom coupon codes (40%), email promotions (49%) and word-of-mouth product recommendations (40%) being the most popular personalized offers.
  • 69% of respondents defined customer support value as the quick and easy availability of a rep, while 76% emphasized swift issue resolution.
  • Nearly two-thirds of respondents (64%) stated that they have used a customer service chatbot in the past year, appreciating benefits like instant responses, answer provision to simple queries and ease of communication.
  • Finally, leading customer service pain points include long wait times (61%), the need to repeat information (60%), and the absence of issue resolution (60%).

"Brands are at a critical turning point,” said Stephen Ehikian, co-founder and CEO. “After massive growth throughout the pandemic, we are seeing a significant shift as consumer spending is tested by inflation and a looming recession. Brand loyalty and customer retention are vital for retail brands, and the recent research suggests that brands must listen - and act - to compete this holiday season.”

Edited by Alex Passett
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