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Customer service reaches tipping point - Cold man with scarf and hat
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Service managers fearing winter of discontent as customer concerns grow

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60% of customer service managers say this will be the “toughest winter yet”, as fears of losing customers grow.

8th Nov 2022
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Customer service managers are bracing themselves for a harsh winter, with many believing the industry has reached a 'tipping point' with customers becoming increasingly abusive or leaving altogether. 

New research by gig customer service platform Limitless found that 60% of service managers predict that this will be their “toughest winter yet” as disgruntled customers become more commonplace amidst the economic turmoil. 

The survey of 250 customer service leaders in the UK and US found that nearly half (48%) of customer service managers have seen customer willingness to buy, repeat purchases, and retention rates drop as a result of the potential recession. Additionally, two thirds of respondents report that customers are becoming more difficult to deal with and that customer expectations are higher than ever.

C-SAT scores were another area of concern revealed within the survey, with over 40% of respondents admitting that scores have fallen by 5-10% in 2022, with another 34% revealing they have fallen 10-15%.

In explaining the drop off, 44% stated that they have found it difficult to maintain C-SAT scores in the last 3 months in comparison to before the pandemic. Within this subset of respondents, 61% claimed that the decrease was a result of frustration due to recession fears or staff shortages.

The tipping point

Whilst there are undoubtedly other factors to consider, the research clearly shows that financial insecurity and fears of a recession are the major issues facing customer service right now.

As customers are forced into being more shrewd and frugal with their spending, their expectations of the products they buy and the customer service they receive is also increasing.

The American Customer Satisfaction Index reported that customer satisfaction levels have dropped by 5% since 2018 – the largest descent in the 28-year history of ACSI. Meanwhile, the Institute of Customer Service in the UK recently reported that customer service complaints have hit their highest level on record.

With many people now having to make tough decisions on which items they sacrifice and which they keep, it is understandable that they want to ensure that they are getting the best possible value for any and all purchases.

This tension is tipping over into outright abuse at times. And in separate research by the Institute of Customer Service, it was revealed that more than half (54%) of service representatives are experiencing verbal abuse, and very concerningly, 27% experiencing physical abuse.

But it is not just customers who are feeling the pressure of the current climate, with many customer service employees also dealing with financial worries, as well as having to interact with increasingly demanding and frustrated customers.

Indeed, when asked what their biggest fear for 2023 was, the customer service managers surveyed indicated that employee mental health suffering was the top concern at 28%, with staff shortages a close second.

Unfortunately, there seems to be no let up in the immediate future. The latest news on the UK’s financial situation has seen the interest rate rising to 3% – it’s biggest hike in decades, with the Bank of England predicting that the UK will fall into its longest ever recession.

So what can customer service departments do to contend with a customer base in crisis?

Retreating from the precipice

In an attempt to balance the scales and put distance between themselves and the tipping point, the research has revealed that organisations are looking to CX leaders to find ways to boost customer satisfaction.

To ensure customers aren't lost as we head into the recession, empathic customer support (36%) followed by flash sales, incentives and discounts (34%) rank as the top business strategies to improve customer satisfaction.

74% of customer service managers are looking for alternative models to staff service and keep customers happy.

As difficult a period as it is, some businesses are also seeing it as an opportunity to develop more innovative customer service strategies, with 74% stating that they are looking for alternative models to staff service and keep customers happy.

Interestingly, there seems to be a distinct split between the US and UK when it comes to this mindset. Whereas the majority of respondents in the UK (57%) said they are just trying to survive this challenging period, 56% of the US respondents see this period as a ‘time to shine.’

As with most situations, the answer probably lies somewhere in the middle. Whilst maintaining a positive mindset and looking for ways to innovate are always beneficial, there is no denying that the customer service industry is going through an incredibly difficult time and the worst may be yet to come.

 

Replies (1)

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Michelle Spaul Customer Experience Consultant
By Michelle Spaul
10th Nov 2022 10:29

Excellent article, I particularly like the section - retreating from the precipice. I 'spoke' with three banks in the last two days. The easiest question went to the one that had no empathy, no notion of customer listening and was, frankly, patronising. They will lose my custom.

At the same time, businesses have the opportunity to listen to Customer Services and prevent the problems that cause calls. Each of my calls were preventable and I would have had a much better day, if I felt those businesses were taking the opportunity to prevent customer stress in the first place.

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