Originally published in MyCustomer
Consumer perceptions of customer service offered by most businesses across most sectors are broadly similar and middling – in other words, undifferentiated. Why is this? And what does it mean for your company?
Big businesses have rightly been focusing on delivering what customers want over the past 10 years. But their efforts have resulted in ‘the averagisation of customer service’. Now could be the time for leaders to ‘buck the trend’ and differentiate their organisations to create real ‘blue water’ between the customer service they offer and that of their competitors.
If we look at how consumers rank the customer service of the large brands they deal with daily (often measured on a 100-point scale), most organisations fall within about 10-20 points of each in a random sample. This means that consumer perceptions of customer service offered by banks, utilities, telecoms, High Street retailers, insurers, etc. are broadly similar and middling – in other words, undifferentiated at best.
In our study for BT and Avaya, more than 80% of consumers said the service from different financial services providers meant it wasn’t worth them making the effort to switch banks.
We’re talking about customer service here – and a tight definition of it at that. We’re not including wider assessments of customer experience, which some take to include pricing, product, branding, and even trust measures.
There are exceptions to this trend of the averagisation of customer service. Brands such as First Direct do consistently well, rising above the rest. But along with John Lewis Partnership they’ve faced surprisingly few challenges from large organisations over the past 10 years, bar Amazon.
Conversely, there is always the odd utility company (or airline) that scores well below the average in benchmarking. The NPS measure pulls apart organisational performance more widely, but it often tends to capture a wider perception of the offer rather than just customer service experience. So to online customer review sites which often capture comments about product quality.
There are many criteria that are ‘meaningful to the consumer’, and help them differentiate between one organisation and another. These include price (as in the case of AO.com or Lidl), perceptions of product superiority (with Apple and Tesla) or even pure brand perception, as we see when a product or service is rising the S-curve of fashionability (such as the Gucci).
Consumers are alert and act on differences between products and prices, as the supermarket wars continue to remind us. (Note, though, that it took many years of operating in the UK for Lidl and Aldi to achieve a 10% market share.)
What is driving the trend towards the averagisation of customer service?
A problem of measurement? Are the benchmarks of customer service and experience proving inadequate to understand differences in service? Are the results some trick of statistics, similar to regression to the mean? Would detailed qualitative research or neurological studies be better for drawing out the differences in customer service perceptions between brands? Perhaps, but different studies report the same clustering of large organisations’ customer service performance.
A human perception issue? Consumers don’t always notice what we in the industry see as real differences in service delivery. We may work hard to create an IVR that sounds the same as our brand’s advertising. Or Tweet responses in channel while our competitor asks the customer to phone the call centre. But overall, do the public notice – or can they remember – our efforts to improve customer service in among the day-to-day milieu of life?
This doesn’t mean your organisation shouldn’t improve: after all, innovation is all around us. But it does mean that improvements in customer service need to be noticeable.
Organisations: lacking in effort? Some organisations remain unambitious about their customer service, and rarely set out to blitz the opposition over it. Ryanair famously decided it needed to improve but it’s not clear by how far. Pret a Manger has always attempted to be better than others on customer service and seek emotional engagement. But many organisations see differentiation as more powerful in other business areas such as loyalty schemes, brand promotion, product quality, and price differentials.
Customer service practitioners: are we all ‘black belts’ now? For all the criticism of customer service that we see in the media and social networks, there are a huge number of people in the UK who have been trained in customer service techniques. In fact, more than 50% of those in work say it involves some delivery of customer service. There is a vibrant public discourse about service, so perhaps it is natural the organisations coalesce around the same level of customer service. With knowledge traveling fast organisations can achieve the same level of service easily.
Does your level of customer service matter?
For some enterprises happy to be average, or others that have the strategy of not delivering customer service excellence (whether stated or not), today’s mediocre service could be fine. In these cases, consumers might not be surprised by the average quality of service they receive.
But for those looking to differentiate their brand and live up to the rhetoric of ‘putting the customer first’ and ‘going the extra mile’, there’s a great opportunity to pull apart from other brands simply by improving the level of customer service offered.
If your product is commoditised in the eyes of consumers and you seek loyal customers, then a move away from the averagisation of customer service gives you the chance to pull away from the norm, and from your competitors.
Do something significant to buck the ‘averagisation’ trend
Customers will care about the level of service you give them, especially in the long-term. Time and time again, data show that good service results in people coming back for more, or creates an aura that consumers notice.
But a word of warning – a truly differentiated customer service experience isn’t something you can create (or consumers will notice) overnight. So that means doing something big, something significant, that the public will notice – eventually. It’s a generation’s work. Ask First Direct or Pret A Manger.