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Customer frustration with chatbots is harming customer satisfaction and undermining business productivity, according to a large-scale study from The Institute of Customer Service.
The report, A Connected World? surveyed over 300 businesses and 1,000 members of the public to explore their attitudes to new customer experience (CX) channels. While concluding that technology can significantly improve customer service, it warns that poorly tested chatbots risk damaging customer trust and undermining profitability. Two in five people (42%) avoid chatbots when making a complex inquiry and 15 per cent lack confidence in using technology to contact organisations.
With public spending hard hit by rising energy costs and soaring inflation, the report warns businesses of the false economy of cutting back on essential customer service channels and personnel. The top reasons for deploying CX technology were cited by managers as opportunities to serve customers better, meeting customer expectations and saving costs. Furthermore, just 57% of organisations are effectively testing the suitability of new digital support channels for potentially vulnerable or excluded customers, and a half of customers say they have (recently or in the past) been forced to step in and assist digitally-excluded friends and family members.
The demand for technology within customer service experience is clear, with 82% of customers regularly using digital channels to contact an organisation such as apps, social media, chatbots and email. If well designed and implemented, the vast majority of consumers are happy for new technologies to be deployed in ways that help them - with at least 70% interested in the potential benefits of technology being used to prevent fraud or enable switching to the cheapest energy suppliers.
Commenting on the report Jo Causon, CEO of The Institute of Customer Service said:
“As businesses face ever tougher operating conditions, technology offers a genuine opportunity to serve customers better and help reduce inefficiencies. Excellent automation and excellent service are not mutually exclusive. Superior customer satisfaction requires the appropriate blend of technology and people to combine efficiency, empathy and responsiveness to personal circumstances.”
It is apparent that customers believe the most important way organisations can reduce the risk of digital exclusion is by enabling people to speak to an employee when it is needed, with the main reasons for contacting an organisation by phone being the need for reassurance and certainty or about an issue that could not be resolved online or via an app.
In addition, over 20% of customers said they contacted an organisation by phone because they felt it was the quickest and easiest way to deal with an issue. Only 15% said that they always preferred to contact the organisation by phone.
Causon concludes: “Despite its transformational potential, in practice, current AI capabilities are often nowhere near as advanced as we might like. We therefore need to think hard about where we deploy and how we use AI to build better customer experiences. What we must never lose sight of is that both customers, and indeed many businesses, still see access to a human person as an essential option in the delivery of effective customer service.”
Other findings suggest that 54% of managers and employees across UK organisations agree that, since the emergence of Covid-19, their organisation has focused on reducing the volume of customer contacts.
However, 68% of managers and employees believe that, during the Covid-19 pandemic, it has been more important that organisations enable customers to speak to a person when needed. The main reasons for enabling customers to speak to a customer service employee are to give empathy or reassurance, as technology alone does not sufficiently address customer needs and the limitations of some customers’ ability to use technology effectively.