Are organisations failing in their use of social media and apps as customer service channels?

Guy Cranswick of IBRS has brought my attention to a media release about a new report from Fifth Quadrant, a leading Australian customer experience strategy and research consultancy, on social media and smartphone app customer service enquiries.

The report looked at how many Australian consumers had used these channels for customer service enquiries and why they’d used, or not used, them.

The figures are quite dim reading…

The study (of 520 participants) indicated that only 16% of Australian consumers have ever used social media for a customer service enquiry and less than one in 10 Australians had used this channel for customer service in the last three months. Gen Y ran ‘hotter’, with 29% having ever used social media for a customer service enquiry.

Why didn’t people use social media for these enquiries? The survey broke down the reasons as follows (multiple reasons allowed):

• 32% said it isn’t personal,
• 30% said they did not know that they could,
• 30% said they were concerned with security issues,
• 22% said they thought it would take longer than a phone call, and
• 20% said they did not think it would be a good experience.

The research also looked at smartphone apps and their use in customer enquiries. Here the figures were even lower. Only 15% of Australian consumers had ever used a smartphone application for a customer enquiry (20% amongst Gen Y), and only 8% of consumers had used this channel in the last three months.

The reasons for not using apps were similar to social media:

• 41% said they did not know they could,
• 21% said they thought it would take longer than a phone call,
• 16% said they thought it would make the process slower to talk to a customer service representative,
• 15% said they did not think it would be a good experience, and
• 13% said that they did not think it would be easy to use.

My immediate reaction was to say that, well, social media and smartphone apps are still very young and immature, both effectively five or less years old as mass communication and engagement channels. It takes time for organisations and customers to adopt their use for customer service.

However, other research suggests that this may not exactly be the case.

Fifth Quadrant’s 2012 Customer Service Industry Market Report (with 120 business participants) found that 69% of Australian based organisations had implemented social media and 23% had implemented smartphone apps for customer service. This is a small sample, but still statistically significant.

In other words, while 69% of organisations will accept customer service enquiries via social media, only 16% of Australians have used this approach and while 23% accept these enquiries via smartphone apps, only 15% of Australians have used these channels.

So if organisations are offering these channels, why do so few Australians use them?

More of Fifth Quadrant’s research offers a clue…

How many times should a customer have to contact an organisation to resolve a customer service issue?

Fifth Quadrant reports that the level of ‘first contact resolution’ (where a customer only needs to contact an organisation once to have their query resolved) is much lower for social media or smartphone app than for phone contacts.

• Phone: 78% of queries handled in one contact
• Social media: 59%
• Smartphone app: 51%

In other words, 41% of people attempting to use social media and 49% of those using smartphone apps will have to contact the organisation multiple times (often resorting to phone) to resolve their query.

This significantly increases the cost of the interaction to the organisation and the customer and reduces customer satisfaction.

So what’s the issue? Poor organisational implementation of social media and app channels.

Fifth Quadrant’s Director, Dr Wallace said,

“There is no question that social media and mobile channels will be important in the next few years as the percentage of consumers who use these channels for customer service doubles year on year. Rather, it is a question of how effectively organisations address the supporting business processes and skill levels of social media customer service representatives.

The challenge for Australian business is that they typically do not consider Multi-channel Customer Experience as a strategy, hence these new channels lack integration, they do not have accurate revenue and cost models and there is poor data analytics. This has resulted in a sub-optimal channel deployment and as the research shows, ultimately, a sub-optimal customer experience.”

So let’s go back to the reasons again…

• There was an awareness issue (social media: 30%; apps: 41%).
  Organisations need to integrate information about the ability to engage them through social media and apps in their promotion, packaging and engagement.
• There was a speed/perceived speed issue (social media: 22% (take longer); apps: 21% (take longer) and 16% (slower)).
  Organisations need to integrate these channels with their other customer contact points, building the protocols and processes to make it faster and easier to engage online than by phone.
• There was an experience/usability issue (social media: 30% (not personal), 20% (experience); apps: 15% (experience) and 13% (easy to use)).
  Organisations need to codesign their channels with customers, putting extensive work into the upfront experiential design to make them an easy to use service with a great user experience. The investment in design is more than offset by the long-term cost savings in moving people from high-cost phone to low cost online service channels.
• There was a security issue (social media 30%).
  Organisations need to take the same actions as ecommerce companies did to reduce this to a minimum, providing context, clear security measures and escalation and rectification mechanisms that assure users that they won’t be disadvantaged by any security problems.

Want to learn more about the research and report?

See Dr Wallace’s blog, Your call.

And here are some of the key findings from Fifth Quadrant’s 2012 Customer Service Industry Market Report (n=120):

Social Media:

1. In Australia, the predominant share of the 22 million daily customer interactions handled by contact centres is still handled by live agents (52%). Despite industry increasing the implementation of social media as a customer service channel, Share of Contact Handling by Social Media channels is 0.2%
2. Amongst organisations that offer social media as a channel for customer service, 67% report that the marketing department is responsible for managing it.
3. 63% of organisations in the study have only had social media as a channel for customer service implemented for 1 to 2 years.
4. Amongst organisations that currently have social media as a customer service channel only 29% reported their contact centre has the ability to escalate a social media query through to a customer support application that links through to an agent.
5. Past three months usage of social media as a customer service channel has doubled in the past 12 months (4% 2011; 8% 2012).
6. The proportion of consumers who believe they will be using social media more often in the future has also nearly doubled from 4% in 2011 to 7% in 2012.
7. When asked whether they had received a response from an organisation via a Social Media network to comments they had made through Social Media, only 7% of consumers reported that they had. About 5% of consumers claim to have received essential information posted via a Social Media network. 14% of consumers report they have received information from an organisation via social media about new products and services.

Smartphone Apps:

1. Amongst organisations that offer smartphone apps as a channel for customer service 50% report that the marketing department is responsible for managing it, with a further 33% reporting that IT is responsible.
2. 50% have only had smartphone apps as a channel for customer service implemented for one to two years, with 33% reporting smartphone app has been available for less than 12 months.
3. Amongst organisations that do not currently offer smartphone app as a channel for customer service, 25% report they have no plans to.
4. Further to the existing 8% of consumers who have used a smartphone app for customer service, a further 33% of consumers report that they are likely to use a smartphone app for a customer service enquiry in the next 12 months.
5. Amongst Gen Y consumers, 29% report that they will be using smartphone apps for customer service issues more often in the next 1-2 years. This is significantly higher compared to Baby Boomer (8%) and Silent (4%) generations.