Australian firms failing to deliver good customer experience despite prioritising it claims report
Some of Australia’s biggest firms are delivering a mediocre or poor customer experience, with technology companies among the worst offenders according to a new study.
Forrester Research examined 58 firms across Australia with only 17 per cent deemed to provide a ‘good’ experience, while 52 per cent were judged ‘ok’.
Not one company was said to offer an ‘excellent service’ while almost a third (31 per cent) were deemed poor according to the survey of nearly 9,000 consumers.
The study, the first of its kind conducted in Australia by Forrester, is part of the research firm’s new Customer Experience Index, a report designed to measure how well brands are delivering a quality experience to their customers and the impact it has on their business.
The results were at odds with the seemingly high importance placed on the customer experience by brands, with virtually all claiming it was a high priority. Half the 50 ‘customer experience leaders’ questioned by Forrester identified it as the top priority.
In its research, Forrester found Internet Service Providers were the worst at providing a good customer experience, with Dodo bottom of the pile, and iiNet best.
Mobile service companies fared little better – with Amaysim leading the way and Telstra and TPG equal bottom – followed by TV service providers.
In retail, digital-only retailers were marginally more successful than their traditional counterparts with Amazon leading the online charge. The Good Guys topped the list of traditional players, with Woolworths said to be the worst at delivering quality customer experience.
The top two categories were banks, where the quality of the experience ranged from ok to good – with Bendigo Bank bordering on excellent – and insurance companies, where RACQ came out top.
Asked where they thought they were going wrong, almost four out of 10 customer experience executives blamed a lack of cooperation across their organisation, 30 per cent cited a lack or urgency and 26 pert cent said they suffered from the absence of a clear strategy.
The report’s author, Thomas McCann, said it was “unsurprising” none of the 58 brands delivered an excellent service but said it was clear Australian firms have some “catching up to do” with their counterparts in the US.
The measurement is based on three criteria; emotion, ease and effectiveness, with the first of these regarded as the most influential.
He singled out retailers and tech service providers for their “mediocre” showing.
“Two thirds of the retail brands evaluated deliver only ok experiences so it’s clear that this industry has plenty of room to improve,” McCann stated in the report. “Surprisingly eCommerce pure-plays perform no better than their bricks and mortar cousins.
“The mediocre performance by both retail channels is indicative of an industry that has had limited competition due to Australia’s location and relatively small customer base. However, the growing list of foreign brands setting up shop in the country is quickly whittling away these traditional competitive advantages.
“Smart Australian retailers will realise they need to exceed the experiences overseas brands offer or face a slow, inevitable decline.”
Of traditional tech companies, McCann said the reliance on longer-term contracts was partly responsible for their poor showing while newer entrants are winning the customer experience battle because of their flexibility with some “eschewing contracts altogether”.
“Established players need to get their CX (customer experience) on if they hope to retain anywhere near the market share they currently enjoy,” he said.
McCann said the emotion connection should never be underestimated, revealing that the brand leaders in all eight industries studied delivered higher emotional experiences than competitors.
He cited Optus as an example of a brand which fell behind Foxtel for ease or effectiveness but topped the category because of its emotional experiences.
“Delivering on ease and effectiveness is important but is not sufficient to become a CX leader,” McCann wrote. “Our analysis shows that emotion has the most influence on customers’ perception of their experience.”
Steve Jones
Next Tuesday Silverpop and Mumbrella are hosting a free webinar on mastering customer experience. For more details and to sign up click here.
These companies should spend less on promoting their customer service ethos and conducting obsessive-compulsive NPS surveys, and spend more on *actually delivering* good customer service. Only then will these results be different.
Telstra and the banks – take note.
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If you gave the average manager the choice between:
a) Endless reports and graphs to monitor CX, or;
b) Improving CX enormously without any reports to show by exactly how much;
…which do you think they’d choose?
Of course. Everyone’s more interested in showing their boss that they’re doing something, anything, and consequently most companies are terrible at almost everything they’re supposed to do.
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Across the retail sector there is plenty of talk about the customer experience and it usually eventuates in a digital experience rather than a real customer loyalty reward as the engagement facilitator.
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“The mediocre performance by both retail channels is indicative of an industry that has had limited competition due to Australia’s location and relatively small customer base. However, the growing list of foreign brands setting up shop in the country is quickly whittling away these traditional competitive advantages.”
Amen.
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Great summary of my report by Steve Jones – thank you.
There is no doubt most of our business leaders and their employees want to deliver a better, more differentiated, customer experience (CX) but the reality is they don’t have a strategic framework for doing so, leading to the mishmash of poor to average experiences Australia’s consumers are currently subjected to. (No, my editor wouldn’t let that through but he isn’t seeing this!). And there is also no doubt that companies that deliver great customer experiences (USAA, Amazon, Apple) have leaders that are truly committed to building CX capabilities within their organisations just as they build and support other, more traditional, business disciplines. Come on Australian business leaders – get in the game!.
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@Tom
But Tom, to deliver an epic CX you have to, wait for it……….. D R U M. R O L LL: Give a hoot about the customer.
What purpose do many of our major Aussie brands stand for and are all depts alligned to thir purpose? The reality is most do not even have a purpose. They have a few pointless values, knocked up on a napkin to keep HR happy and rest is red tape and p1ssing in the wind……
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Suspect this is more of problem ingrained into Australian culture itself, rather than corporate operations.
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(Big thumbs re my prev typos.)
Compare Zappos and what they stand for versus the money grabbing, thieving ivory towers of Australia’s largest companies. The arrogance of a few meaningless company values. Again purpose is key. Customer first is key. Who on the list puts customers first? Zappos do, they are a benchmark.
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The problem is Australia has become a county of rent seekers, especially exploiting monopoly, duopoly, virtual monopoly rents.
Who needs customer service when the customer has almost no choice to go anywhere else!
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