Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we’re looking at the cost of bad customer service, marketers missing out on personalisation techniques, demands for sustainable shopping, and B2B buying habits.
Key news
- Job vacancies in England have fallen to a three-year low, according to data from Reed Recruitment, which shows listings for open positions decreased by nearly 25% in the three months to February compared to a year earlier. At the same time, applications rose by 20%, suggesting a cooling labour market. The year-on-year slowdown in hiring spans all sectors except estate agents, with southern England experiencing the most significant declines. Retail, science, security, and transportation and logistics were among the industries with the largest declines.
- How important is visibility to progression? With hybrid work on the rise in the UK, the question is gaining traction. Compared to six European countries, including France and Germany, UK employers offered the highest share of hybrid job postings in December 2023, with 43% of all jobs offering some form of hybrid work. New LinkedIn data also shows that women are more likely to have a hybrid role than an onsite or remote one. However, experts warn that the importance of in-person visibility for promotions risks creating a “hybrid ceiling” for women.
- New innovations appear to be everywhere at the moment, but they might not be as good for workers as more traditional technologies. A study by the Institute for the Future of Work concluded that AI-based software, robots and surveillance trackers are having a negative impact on people’s health and wellbeing when they’re exposed to them at work. By contrast, using more well-established information and communication technologies such as laptops, tablets and instant messaging at work tended to have a more positive effect on wellbeing, the researchers found.
Bad Customer Service Threatens $3.7 Trillion Annually as Frontline Workers Reach a Breaking Point
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.
Many bad experiences go unnoticed as customers provide less direct feedback
Companies are also grappling with a growing reluctance among consumers to give direct feedback such as survey responses. Only a thirdof consumers give direct feedback every time they have a bad experience with a company, but they are providing feedback in less direct ways, such as in call centre conversations, online chat, product reviews and social media posts. AI can analyse these unstructured forms of feedback and help companies build a richer understanding of what customers want and expect by tuning into both direct and indirect sources of feedback.
Only one in ten marketers using AI for personalisation
Despite ongoing advancements in artificial intelligence, only one in ten (13%) marketers has started using AI to produce personalised experiences for their customers. That’s according to research from Optimizely.
The research, based on a study of 100 UK marketing leaders, maps the maturity of personalisation across the UK, and explores the role of AI in digital experiences and personalisation.
While most marketers have adopted basic personalisation technologies, AI is not yet widely used in their campaigns. Currently, teams primarily use real-time segmentation (57% have adopted), user segmentation (55%), and dynamic content (51%). A third of marketers (33%) have also incorporated ‘hyper-personalisation’ into their campaigns — continuously personalising experiences using highly relevant real-time data.
Despite all these advances, 74% say it’s still proving difficult to stand out with their current personalisation technologies. Three quarters (74%) also worry that their current tech is out of date.
It’s clear that consumers are feeling this disconnect as well. According to related data from Optimizely, two-thirds of consumers (70%) remain frustrated with ‘targeted’ promotions that don’t actually relate to their personal interests.
By leveraging AI responsibly and ethically, marketers can unlock deeper customer insights, anticipate buyer behaviour, and create personalised journeys at scale that resonate at an emotional level. Through this, brands can improve differentiation, brand loyalty, and ultimately, driving real business growth.
Almost half of shoppers want more sustainable returns
Almost half of UK consumers (48%) want returns to be more sustainable, according to the latest research by SAP Emarsys Customer Engagement, which conducted research amongst over 2,000 shoppers across the UK.
The research, which launches at Shoptalk in Las Vegas, reveals that for a fifth of UK consumers (20%), sustainability is now the most important consideration when making purchases.
In fact, almost half (47%) of UK shoppers are more loyal to a brand that has a sustainable returns process, for example by using less packaging, or recycling returned items.
UK consumers want solutions. The SAP Emarsys research found that over half of consumers (53%) agree that retailers should re-sell returned items at a lower price to improve sustainability. Alternatively, 52% would like to see retailers accept returns at local depots to improve sustainability.
However, over two-thirds of respondents (66%) say they prefer not to return items, and 56% want retailers to “get it right the first time,” indicating over half of UK consumers do not want to deal with returns in the first place.
B2B Web Stores Are Driving Buyers Away
According to the new 2024 B2B Buyer Report from Sana Commerce, B2B buyers are making purchases online more than ever before. Two out of three B2B buyers prefer to place their orders online through suppliers’ websites, and 79% prefer to place repeat orders online. B2B ecommerce has even become the norm for complex and high-value orders: 58% of B2B buyers want to conduct these transactions online.
But even though B2B online buying has entered the mainstream, B2B sellers are facing a big threat: too many buyers are having a bad experience with B2B web stores. And buyers are willing to jump ship because of it. The survey revealed that 74% of B2B buyers said they would switch suppliers if another B2B web store offered a better experience. This issue is particularly pronounced for US buyers, where the percentage spikes to 91%.
Eighty-four percent of B2B buyers say that an easy, accurate online web store experience is important to them – but too many B2B sellers are not meeting this expectation. According to the survey, 68% of B2B buyers are discouraged from ordering online because of order errors. The data revealed that B2B buyers are experiencing order errors on 33% of their total online orders, indicating a noteworthy surge from 2019 (28%), despite the advancements in automation.
Here are a few of the biggest reasons that are holding buyers back from placing B2B orders online:
- 31% of buyers said lack of accurate delivery time information
- 29% said lack of accurate pricing information
- 28% said lack of accurate information on stock levels
- 28% said lack of product information
B2B web stores are part of a company’s brand reputation, and can often make or break a customer relationship. When B2B buyers have a bad experience with an online purchase, it’s likely to affect their overall relationship with the seller. Eighty-seven percent of B2B buyers said that a bad buying experience would impact their supplier relationship to some extent.