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25 reasons why customer service is vital in 2023

Consumers today expect a great experience and how you deliver customer service is at the heart of it. Brands that meet their consumers’ needs are setting themselves up for success; they’ll improve the experience throughout the entire customer journey, build brand loyalty, increase retention rates and ultimately help grow the bottom line.

Research shows that consumers are willing to spend more money with companies that provide better customer service, and will quickly switch to another brand when they’re not meeting their expectations. Brands must earn loyalty from customers with each interaction and anticipate issues before they arise.

Don’t just take our word for it, we’ve collated everything you need to know about the importance of being a customer-centric business in 2020 and beyond.

General customer service:

1. 68% said that a pleasant customer representative was key to their recent positive service experiences, and 62% said that a representative’s knowledge or resourcefulness was key. (American Express)
2. The #1 reason customers switch away from products and services is feeling unappreciated. (New Voice Media)
3. Turnover for customer service employees is 27% annually, the highest in the business world. (Mercer)
4. 54% of customers have higher expectations for customer service today compared to one year ago and that number jumps to 66% for consumers 18 – 34 years old. (Microsoft)
5. Consumers feel the most significant root causes of poor service are (Genesys):

  • Repeating themselves
  • Being trapped in automated self-service
  • Forced to wait too long for service
  • Representatives don't know my history and value
  • Cannot switch between communication channels easily

The cost of poor service:

6. 33% of Americans say they’ll consider switching companies after just a single instance of poor service. (American Express)
7. Only 40% will trust a company if it has poor customer experience (vs. 76% - good). (Qualtrics XM Institute)
8. Only 30% will forgive a company for a bad experience if that customer experience is deemed poor generally. (Qualtrics XM Institute)
9. It takes 12 positive experiences to make up for 1 unresolved negative experience. (Ruby Newell-Legner’s “Understanding Customers”)

The rewards for excellent service:

10. Customers who rate a company as delivering “good” customer experience are 34% more likely to purchase more, and 37% more likely to recommend. (Qualtrics XM Institute, ROI of Customer Experience)
11. Customers are 64% more likely to try a company’s new offering if they think the company has very good customer service. (Qualtrics XM Institute, ROI of Customer Experience)
12. The payoffs for valued, great experiences are tangible: up to a 16% price premium on products and services, plus increased loyalty. (PWC Experience is Everything)
13. Increasing customer retention rates by 5% increases profits anywhere from 25% to 95%. (Bain and Company)

Channel-specific customer service:

14. As technology continues to improve, don’t forget the human aspect. 82% of U.S. and 74% of non-U.S want more of it. (PWC Experience is Everything)
15. 42% of those that contact a company through social media respect a response within 60 minutes. (The Social Habit)
16. 67% of customers reported hanging up on an automated system out of frustration at not being able to talk to a real person. (Glance)
17. 92% of consumers are satisfied with live chat, making it the highest-rated engagement channel. (ZenDesk)

Retail customer service:

18. 89% of customers who gave a retailer a high emotion rating said that they would recommend the company (Qualtrics XM Institute, CX in the Retail Industry Report 2020)
19. 59% of customers who endured a poor experience said that they either decreased or stopped spending with them after that poor interaction, which is higher than almost any other industry. (Qualtrics XM Institute, CX in the Retail Industry Report 2020)
20. 69% of U.S. online adults shop more with retailers that offer consistent customer service both online and offline. (Forrester)

Other industries:

21. 43% of US auto insurance customers say it would be easier to file a claim if they had one representative to be a single point of contact to manage the claim. (Qualtrics, Auto Insurance Trends and Consumer Report)
22. Poor service is the number one reason for leaving among customers who are “very sure” they’re leaving their bank. (Qualtrics, Banking Customer Experience Report)
23. Rewards and customer service are the top non-fee or rate attributes that customers look for in their next card.
24. Clients who have switched advisors say their motivation was high fees, poor service, and lack of personalized attention. (Qualtrics, Financial Advisor Client Experience Report)
25. 57% of hotel guests say “unfriendly employees” cause them to have a negative experience at a hotel.

How do you know if you’re succeeding?

Ask your customers, and use the insights gathered to make quick improvements when you’re falling short.

10 books every CX leader should read in 2020

Harry Gough // Content Strategist

With an English Literature degree from Loughborough University under his belt, Harry’s career has been all things content related ever since. He now spends his time helping Qualtrics tell the Experience Management story, showing the value that it brings to brands and most importantly, their customers.

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