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Is Australia a Customer Service Backwater?
By Kevin Dwyer
Friday, 8th August 2014
 
Has Australia become a customer service backwater? Are companies interested in providing customer service any more, or does the ends justify the means when it comes to generating profit? Have the days of exceeding customers’ expectations being seen as a driver of profits gone?.
 
Qantas example
 
My personal experiences suggest so. Almost 12 months ago, my mother-in-law died. I had a trip booked to Baltimore to attend the National Association of Corporate Directors Conference and stay on for another few days to train the board of one of our Pacific Island clients, who were attending the conference as part of their development. I discussed cancelling my attendance with the client and postponing the training. They readily agreed, believing that my place was to support my wife and her family.
 
We cancelled the flights and were advised by Qantas that we would be offered a voucher to be spent in the next 12 months as part of the conditions of the ticket. The voucher was specific to me, not Change Factory. OK we thought, we understand that, we would easily spend the more than $9000 in a year; our international travel bill being usually three to four times that amount.
 
However, we underestimated Qantas’s resolve in making it difficult to spend the voucher. Our first attempt was to spend part of the voucher on a trip to Micronesia. Unfortunately, we were told, the total spend had to be in excess of the voucher value and we would miss that by about two to three thousand dollars. The fact that I cancelled the flight because of my mother-in-law’s death fell on deaf ears. So too did my plea to take into account my lifetime gold status as a frequent flyer with several years at platinum level over the almost 40 years of being a client.
 
I must admit, the operator I was discussing this with did have some suggestions. One was to fly first class to Hong Kong and the other was to book an around the world flight. When I indicated that I did not have any clients or prospects in Hong Kong and could not see the benefit in flying around the world, her response was that I should complain to the customer complaints department.
 
In a follow-up many months later, and a month or so before the voucher was to expire, I thought I had an opportunity to spend the voucher. The same client had arranged for more training in Hawaii. I could fly there through Fiji and visit clients, then come back through Fiji and on to Port Moresby, where I could see other clients, and then back to Melbourne. The total cost was in excess of the voucher value and my problem would be solved. Once again, I underestimated Qantas. The response this time was that the voucher had to be spent on a return flight only, not a multiple city flight.
 
Qantas’s approach to customer service – where concern for the customer is hardly on the radar –  is not unique, if recent research is anything to go by.
 
Australia’s Customer Service Report Card

 
In the retail world, a new survey by consumer advocate group Choice used shadow shoppers to rate the customer service performance of 10 of the biggest retailers, including Harvey Norman Myer, David Jones, Target and JB Hi-Fi.
 
Harvey Norman received the worst feedback, however, staff frequently ignoring customers and showing a lack of product knowledge was a consistent theme that frustrated shoppers. Perennial whipping boys in customer service, Myer and David Jones continued to have shoppers consistently complaining of sales assistants engaging in conversation with each other while they waited for service.
 
An American Express survey (Echo Research, 2012) comparing customer service outcomes in eleven countries showed that customer service in Australia was in a parlous state.
 
In Australia, 65% of consumers thought that companies were ‘paying less attention to customer service’ (36%) or had not changed their level of attention. Not only that, but only 2% of consumers felt that their expectations were being exceeded and 40% felt that their expectations were not being met – making Australia second only to France (55%) in providing service below customer’s expectations.
 
The vast majority of consumers (80%) in Australia feel that organisations either don’t do anything extra to keep their business (42%) or take their business for granted (25%) or don’t seem to care about their business (13%) making us third behind France and the UK in the “Why would I care about your business?” stakes.
 
Those numbers are sad in themselves, but are even more frustrating when the impact they have on businesses is taken into consideration.
 
72% of Australian consumers are more likely to have spent more money with a company with which they have had a history of good customer experiences, with 71% saying they are willing to spend more money with companies with a good customer service reputation. Consumers believe that companies who provide good customer service have earned their business (28%). At the other end of the scale, 30% say they do not spend money with companies who provide poor service.
 
A whopping 95% of people tell other people about their good experiences all of the time (48%) or at least some of the time (47%). The same percentage of people tell others about their bad experiences however, a full 64% say they do it all of the time.
 
And Australia lies third behind Mexico and India in consumers not completing a purchase because of poor customer service (65%). Poor customer service equals lost sales.
 
The only bright spot in the customer service landscape appears to be hospitality and casual dining, scoring the highest positive results of all sectors. However, even their scores were low by comparison with other countries. Australia, along with the Netherlands, Japan and the UK were considered to have a low rating in general for customer service.
 
So what should companies be doing to avoid being the Qantas or the Myer/David Jones of customer service?
 
Creating a Customer Service Environment

 
4Hoteliers Image LibraryThe first element of improving customer service is for the leadership to communicate through devices such as vision and mission and values a real commitment to having concern for the customer. Concern for the customer must be promulgated through the policies, processes, and procedures the company creates.
 
Secondly, customer service must feature heavily in the way in which performance of teams and individuals are managed. Individuals and teams must believe that having a concern for the customer is a good thing to do, is normal and that they have the authority and capability to make that concern real in the mind of the customer.
 
If there is incongruence between the stated aims of the first element with the way people are led and managed in the second element, then the chance of actually delivering good customer service is low. This is the usual Achilles heel of customer service. In my Qantas example, there would appear to be a reasonable disconnect in their stated aim of “Customer Service Excellence” and their ability to deliver at the customer contact interface.
 
Aiming too low?
 
The airline industry in itself perhaps gives some indication of why Australia fares poorly in customer service surveys. The billboards we see proclaiming who won the Airline of the Year Award with regard to customer service are proclaiming customer satisfaction levels of no more than 85%. This is below the usual zone of indifference where customers are equally likely to switch as they are to stay loyal. The airlines compete at levels of customer satisfaction where most of us go “Ho-hum”.
 
Given that research (Pinder, 2014) has shown that organisations with customer satisfaction levels above 90% experienced significantly higher revenue growth than those lying in the zone of customer indifference with less than 90% satisfaction, one might have expected that organisations would invest more in actually delivering excellent customer service, especially when the Australian economy battles the impact of a high dollar making its goods and services expensive on the world stage.
 
Works Cited
 
Echo Research. (2012). 2012 Global Customer Service Barometer. Retrieved from American Express: http://about.americanexpress.com/news/docs/2012x/AXP_2012GCSB_Markets.pdf
 
Pinder, A. (2014, July). Aberdeen Group. Retrieved from Next Generation Customer Experience Management: www.aberdeen.com/Aberdeen-Library/7092/RA-customer-experience-management.aspx

Contact Kevin by email at kevin.dwyer@changefactory.com.au or via phone on +61 (0)408 508 490

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