Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we’re looking at new research from Qualtrics and RingCentral on customer service’s effects on the customer themselves, and frontline workers. UK marketers fear AI will create biased or plagiarised content, and SMBs are facing a new obstacle in data protection.
- Zoom has announced new AI Companion capabilities to help improve connection, productivity, and collaboration across the platform. Along with additional enhancements across Zoom Team Chat, Zoom Whiteboard, and Zoom Meetings, Zoom AI Companion, the company’s generative AI assistant, can now help administrators track AI usage and adoption, and contact centres agents improve interactions with customers.
- The government has announced the creation of a new Small Business Council, designed to give the UK’s 5.5 million SMEs better representation within government. According to government statistics, SMEs support 27 million jobs across the UK, accounting for £4.5 trillion of annual turnover. The Council will provide a forum for small business leaders around the UK, enabling them to share their concerns with policy makers.
- As economic, climatic and technological uncertainty mounts, LinkedIn data shows a rise in risk management roles within the UK financial services sector. There is increasing demand for underwriting analysts, enterprise risk managers, insolvency practitioners, claims specialists and private equity associates. Meanwhile, insurance and real estate firms are top employers hiring in “risk-related” jobs, and critical skills include risk management, insurance, reinsurance and data analysis.
Bad customer service threatens $3.7 trillion annually, as frontline workers reach a breaking point
New research from the Qualtrics XM Institute finds that globally, organisations are putting $3.7 trillion annually at risk due to bad customer experiences, an increase of approximately $600 billion (19%) compared to projections from last year.
Bad customer experiences lead directly to lost revenue, and just one negative interaction can result in losing a customer and their potential spending in the future. Consumers say they have very negative experiences with organisations 14% of the time across 20 different industries including fast food, parcel delivery services, auto dealers, and airlines. And after a negative experience, consumers reduce or stop spending with that brand more than half the time (51% of negative experiences). That figure jumps to over 60% for parcel delivery providers and fast food restaurants where the cost of switching is very low.
Poor customer service comes with growing costs for businesses, with 33% of consumers in the UK decreasing their spending as a result and 15% stopping spending altogether. While UK consumers report slightly fewer negative experiences (-3.6 % points) compared to a year ago, increases in consumer spending mean there is more revenue at risk due to bad experiences.
Human experiences will continue to be a priority for companies but AI can provide support
Research from Qualtrics XM Institute has shown that investing in frontline employees pays off with an improved customer experience. However, Qualtrics found that frontline workers, such as cashiers, bank tellers or restaurant servers have the worst morale compared to other types of employees and they feel a lack of support to effectively do their job. Only 1/3 of frontline employees who have been with a company for less than 6 months intend to stay more than three years.
More businesses with frontline workforces are exploring how AI can help reduce the burden on workers and increase productivity. The most common way employees say AI can help is by automating routine tasks so they can focus on more complex work.
As organisations incorporate AI into customer interactions, they must address consumers’ fear of losing the human connection. Nearly three-quarters (73%) of consumers are comfortable using a chatbot for simple, transactional activities like checking the status of an order. However, they are averse to using it when the stakes are high—for example, 81% of consumers want to speak with a human being for advice on a medical issue.
“The findings highlight that consumers have a heightened awareness of how they’re being treated, and are more likely to change their spending patterns after a bad experience. Companies that want to sustain their customers’ loyalty will need to systematically identify and avoid issues that they can anticipate, and recover more quickly and effectively from the problems they can’t anticipate. This will require applying tools like AI to a variety of different data sources.”– Bruce Temkin, head of Qualtrics XM Institute.
Nearly one in five Brits would rather deal with a vermin infestation than contact customer services
RingCentral shares research revealing many Brits are so frustrated with customer service interactions that nearly one in five (18%) would prefer to deal with a vermin infestation in their home than contact customer service.
Against the backdrop of the current cost-of-living crisis, the majority of Brits (97%) are naturally citing price as the most important factor influencing their purchasing decisions. However, not far behind, many Brits (87%) reference high quality customer service as an important factor.
RingCentral’s data suggests high quality customer service experiences are a cornerstone for retaining customers, with two thirds (65%) saying they would be unlikely to return to a company that delivered bad customer service.
Feelings of frustration with customer service are flourishing among Brits
Despite the clear importance of quality customer service, Brits are regularly being left frustrated, with automated customer service systems (53%), the amount of time to speak to / hear back from customer service (43%) and having to explain the issue multiple times to different people (42%) cited as the biggest frustrations. Compounding this, of the 91% of those who have been passed on between agents, 98% then have to re-explain their reason for contacting customer service.
As a result, Brits are so frustrated with customer service interactions that more than half would rather be without TV for an hour (53%) or clean the bathroom (51%). Meanwhile, two fifths (42%) would rather go without the internet for an hour and almost a fifth of UK adults (18%) would prefer to deal with a vermin infestation in their home than contact customer service.
Consumers feel AI can help improve customer service
Given the role AI tools can play in driving more positive agent and customer experiences, RingCentral’s research also explored where consumers would most like to see AI focused on the customer service journey to help mitigate frustrations.
The data reveals over a third (35%) of UK adults would most like to see AI enable a single agent to access their full history to avoid repeating information. A further 34% would like AI to help reduce the average hold times when calling customer service, while 28% wish to see it playing a role in expanding availability of support to 24/7.
By embedding generative AI in the contact centre, businesses can increase effectiveness of customer service agents and reduce time spent on admin, freeing agents up to focus on serving customers.
UK marketers fear AI will create biased or plagiarised content
As the artificial intelligence (AI) boom continues, well over two-thirds (69%) of UK marketers fear generative AI will create content that is biased, plagiarised or misaligned with their brand’s values.
This is according to HubSpot’s ‘A Guide to Accelerating Business Efficiency in 2024’ report, which found that fears surrounding the use or misuse of AI isn’t slowing down businesses from integrating AI tools into day-to-day working life.
52% of marketers already use AI or automation and 45% of those who don’t will do so this year. Moreover, three-in-five UK workers (62%) already view AI as a co-pilot that can assist them in tackling day-to-day tasks at work – although almost a third (32%) don’t trust generative AI to create content that truly captures their brand values.
Disparities and priorities of sales and marketing teams across Europe
In the dynamic landscape of European markets, a pressing challenge lies in the disconnect between sales and marketing teams, with only a third (35%) reporting strong alignment.
A staggering 61% of sales representatives emphasise the growing importance of team alignment this year, underscoring the need to address silos as a fundamental strategy for boosting revenue and generating new leads.
Surprisingly, a significant 72% of company revenue currently originates from existing customers, surpassing the amount generated by new leads in the pipeline by over twofold. This trend explicitly highlights where the focal points of marketers and sales teams will be in the battle for customer loyalty, especially as the deprecation of third-party cookies continues its course.
When it comes to data privacy, the majority of marketers (84%) acknowledge that their strategy was significantly impacted by the changes witnessed in 2023, while three-quarters (76%) predict that Google’s phaseout of third-party cookies will pose additional challenges in marketing efforts.
Amidst these disparities and evolving market dynamics, AI-generated content emerges as a promising solution for marketers and sales professionals seeking to streamline their efforts and drive success. An overwhelming 82% of professionals report that AI empowers them to create more content effectively. Additionally, 63% of sales professionals assert that AI provides a competitive edge against other businesses, while an impressive 86% anticipate that AI will simplify the process of upselling.
SMBs must prepare now for Data Protection and Digital Information Bill, or lose market share
With revisions to the Data Protection and Digital Information Bill expected to come into play in Spring 2024, Quadient predicts 50% of SMBs will look to re-invest in customer communications. The new regulations will loosen the shackles around the consent and impact of data sharing, meaning SMBs become able to use this data to proactively communicate with and promote to customers and prospects. The SMBs that are ready for these changes will win the lion’s share of the market.
The introduction of GDPR and the Data Protection Act (2018) placed limits on how customers’ personal data could be accessed by businesses. However, with consumers increasingly demanding a high level of personalisation from businesses, SMBs have been struggling to meet these demands with the strict limits they have been working under. Until now, proactive communication and direct marketing has been relatively limited.
Quadient advises that SMBs should act soon to get ahead of the incoming changes, or risk being overtaken by more agile competitors. This might mean creating communication templates or unifying their data strategy; putting data in one accessible place where it can be used by different parts of the business.