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Whose fault is it, anyway?

This article appears in the issue July/August 2007, [Vol 16, Issue 7]


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The Internet age was supposed to usher in new levels of efficiencies for enterprises and unparalleled customer service, and KMWorld’s mission is to highlight the success stories of the companies that have achieved those goals. But we all know that a sizeable percentage—maybe even the majority—of organizations focus almost exclusively on business efficiency while ignoring the customer. (Although it’s incredibly tempting to launch into a tirade about the atrocious service I recently received from a financial services firm, it would be too self-indulgent. Plus, I’ll wager that all of you have suffered similar, or far worse, experiences.)

Instead, I’ll summarize a study jointly performed by KANA and IBM that looks at online customer service in the U.S. financial services sector. The research makes a strong case for a multichannel approach to customer service, but KMWorld’s job here is not to endorse a “solution” ... rather to show that failing to properly understand and serve the customer will result in lower business performance. Customers shouldn’t be made to serve the system.

A case in point: KANA and IBM point out that an 11 percent customer dissatisfaction rate at a large insurance company resulted in $476 million in lost revenue because of customer deflection. It’s been well documented in these pages that a poorly performing online system forces customers to escalate to more expensive channels. But those statistics don’t quite go far enough: They really don’t measure the ill will—and destruction of loyalty—generated by a frustrating, seemingly disrespectful customer experience.

Intelligent systems

KANA and IBM explain that they benchmarked the overall quality of online customer service offered by each organization by asking a selection of straightforward, relevant questions using online channels and measuring the usability and responsiveness of those channels. They evaluated the effectiveness of online service channels, including service capabilities; the ability to escalate issues via e-mail, chat, phone and online collaboration tools; and the quality of responses received. Using a “mystery shopper” approach to the process, the survey group included 72 financial services institutions in a variety of industry sectors.

To anyone who has done any finance-related business online, these key findings, taken directly from the study, will come as absolutely no surprise. Most financial services providers risk causing significant damage to their brands with poor online customer service.

  • Ninety-five percent of all FAQs on company Web sites were unable to answer a simple question.
  • Only 33 percent of companies were able to provide a satisfactory answer to the e-mail inquiry.
  • Seventeen percent of companies failed entirely to respond to a straightforward e-mail inquiry.
  • Half of all companies surveyed did not offer a contact e-mail address on their Web sites.

KMWorld acknowledges the severity of the problems discovered by the research. The study implies that the various capabilities of online customer service don’t bring enough “intelligence” to the online system. Whose fault is that? I’d first point my finger to the financial services sector itself for failing to serve their most important constituency.

You can see the entire study here: kana.com/news.php?pressID=414. 


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