Poor customer service costing SA companies billions

New research estimates the cost of people switching from a company because of poor customer service is worth US$47 billion in South Africa.

Accenture, a provider of management consulting, technology and outsourcing services, calls it the “switching economy”, and found that customers in emerging markets are more likely to switch providers due to poor service – particularly within the retail, banking, ISP and mobile provider industries.

“Companies globally and locally have failed to meaningfully improve customer satisfaction or reverse rising switching rates among their customers,” Accenture said; this, despite having more data and insights into consumer desires and preferences.

Accenture surveyed 12,867 end-consumers in 32 different countries across 10 industries, including South Africa.

The research revealed that 76% of SA consumers switched service providers in the past year due to poor customer service.

And 88% of SA respondents said that the company could have done something differently to prevent them from switching.

In line with global findings, the survey indicates that SA customers are increasingly frustrated:

  • That they have to contact a company multiple times for the same reason – 92% of SA respondents, 91% globally;
  • By being put on hold for a long time – 91% of SA respondents, 90% globally;
  • By having to repeat their issue to multiple representatives – 90% of SA respondents, 89% globally.

South African consumers are particularly mistrusting of companies and still rely heavily on person-to-person methods of communication:

  • 57% are concerned about being spammed, which is in line with other emerging markets, but much higher than mature markets at 27%;
  • Word-of-mouth is king when learning about new products and services, instead of an online channel;
  • 92% of South African’s seek customer support by phoning a contact centre, compared to 86% in emerging markets and 77% in mature markets;
  • Going in-store to get assistance is the second most popular option, while using the company’s website is third;
  • Only 6% of South African consumers interact with companies via social media on a regular basis.

Additional findings note that South Africans have the highest share of telling their immediate circle of friends, family or associates about negative experiences with a particular company.

And, unlike other emerging markets, South Africans are more likely to switch despite being offered preferential treatment or rewarded for doing business with them.

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Poor customer service costing SA companies billions