Why is customer service so bad and how can we fix it?

There isn’t much that people generally agree on in the UK these days, but if there’s one topic that seems to unite the country, it’s that customer service in the UK is bad and getting worse. You hear this expressed in different ways - amusingly on TikTok and Instagram, loudly on the bus, despairingly in letters to the Consumer editors of the broadsheets – but it’s there, it’s loud, and it’s getting louder.

The data supports the anecdotes. According to the Institute of Customer Service, CX hit an all-time low this year, with 12 of 13 sectors measured declining vs. last year (the one exception being Utilities, but since this industry was the lowest to start with, it’s not much cause for celebration). It seems customer unhappiness has increased along with the cost of living – 60% of consumers now believe that companies are sacrificing customer experience in favour of greater profitability. As prices have gone up while service has got worse, it’s hardly surprising people are cynical.

As someone who has spent many years trying to make customer experience in the UK better, I find this frustrating – you might say I take it personally. I know most people who work in this industry do as well. I’m sharing my thoughts here with a single intent – to try and change how we think about this problem.

Let’s start with why consumers are so unhappy. The 3 biggest gripes relating to service in all channels are long wait times (43%), the inability to speak to a human being (37%), and having to use chatbots that don’t work (35%). An astonishing 77% of consumers now actively research online how to avoid interacting with chatbots.

These issues are related. Over the last few years, a popular corporate strategy relating to customer service has been to deploy as much new technology as possible to remove the cost of service by diverting it into lower costs channels (online, chat, bot), while reducing costs in assisted channels (stores, contact centres) – sometimes so sharply that they no longer operate effectively.

The problem is that while consumers of all generations love new technologies that empower them and work well for them (Whatsapp, Google maps, any number of smart devices), only 20% describe their experiences of using new customer technologies as empowering. The sad reality is that the implementation of digital technologies in service (with some honourable exceptions, such as banking apps) have often made things worse not better – chatbots can be stupid and repetitive, web links are broken, chats can hang for hours, digital doom loops proliferate. But customers’ underlying problems haven’t gone away – so they vent on social media, email CEOs, complain to regulators, try desperately to get their issues solved and often eventually give up and find another provider. The consequence: the cost of poor service – in complaints and compensation – is ￡6.8bn a year and churn is going up everywhere, hitting both top and bottom line.

So - has the penny now started to drop in the C Suite? On the face of it, no:? according to surveys, 90% of businesses believe they are meeting customer service expectations – but only 43% of consumers agree. And the main topic in the C Suite nowadays around service is how AI can make all of this magically go away – 41% of IT leaders feel their companies will fall behind if they don’t make use of Generative AI, and customer service is often cited as one of the industries that AI will cut a swathe through any day now.

And yet – although it’s not showing up in the data yet - we can see something stirring in UK plc. CEOs can’t ignore all those angry emails they get every day and are getting much more curious about what actually goes on in the frontline. CFOs are seeing that the promised business cases of digital service have not shown up in the P&L. CMOs are paying attention to advertising campaigns which draw attent[DM1]?ion to how much customers like and need bank branches and seeing the advocacy value on social media of Brands who run their call centres brilliantly (tip: answer the phone quickly and empower your people to solve customer issues). CROs are seeing the digital marketing ecosystem become both more expensive and less effective and, at a time when growth is hard to come by, are getting curious about the potential revenue potential of sales-through-service - with the obvious proviso that before trying to sell anything, you have to solve the customer’s problem first. Regulators are imposing big penalties on customer brands whose processes for taking care of customers’ interests aren’t right. And some of the most successful high street brands are investing in in-person experience and sales training (John Lewis, M&S) or starting to remove self-service checkout. After all, 78% of consumers believe that for brands to be successful, they have to connect with their customers in real life…

Straws in the wind or signs of a more fundamental change in how UK pls thinks about customer experience? I really hope the latter. Because the potential of AI in this respect is very real – but not in the way it has often been discussed so far. If Boards continue to think about customer experience as a cost to be managed away, then they risk repeating the mistakes of the first generation of digital service, with the same results. But combining investment in AI with a genuine customer experience mindset could yield brilliant results.

Consider, for a moment, what it feels like to work in a call centre serving UK customers. You haven’t had a lot of training. You don’t receive a lot of pay. You work long hours. Your manager looks after 15 people just like you, so you don’t get a lot of coaching. You use knowledge tools which aren’t properly indexed and don’t help much when a customer is getting frustrated with you. And yet, you show up every day with a lot of determination to do a good job, you genuinely care about doing the right thing, you get frustrated with your company’s own processes, and you probably possess some of the most highly developed people skills of anyone in the workforce, along with a lot of grit and resilience. If we want to make customer service better for everyone, we have to make life better for this critical segment of our workforce.

AI can do that. The new generation of customer interaction technologies can listen to what is happening on calls and chats and coach advisors in real time to help customer better. Gen AI can make sense of knowledge articles and summarise calls to create perfect notes after every customer interaction. Gen AI can make chat bots smarter and more human-like. And ultimately all this learning could create far more effective human-like customer service that could deal with a lot more simple service enquiries in a much more personal and effective way. All of this could free up people to spend more time solving customers’ problems where the human touch is really needed. If we stop thinking about AI as some kind of magic box that will replace people, and start thinking about it more as a tool to help make people brilliant, we could make things a lot better for customers, employees, shareholders and citizens.

But getting it right for customers goes well beyond AI. In practice, it means prioritizing customer experience in how the business thinks and acts.

In particular, this means:?

• Spending what’s needed to ensure you deliver on the basics of service – having people available when customers need them
• Designing the customer journey first and foremost around customer needs – not just ‘digital first’?
• Using data and AI-based tools to understand customer needs and journeys better, reduce customer effort, fix broken processes and listen to the ideas of the employees who actually talk to customers
• Thinking carefully about how to make service work more fulfilling for the people who do it – in particular, enabling them to really take ownership of customer problems ?
• And investing in things that will actually improve customer experience – not just deliver a (probably mythical) cost benefit

CEOs have always known that great customer experiences create loyal customers. The ability to digitise huge parts of the customer journey revolutionised the way businesses and customers interact. It also excited organisations about the potential to generate massive efficiencies and cost savings. In some cases, this new approach worked brilliantly.?But in other cases, experiences fell short of expectations and the prioritisation of digital over human experience has resulted in a service crisis. If CEOs end up repeating this mistake with AI, with customer trust on a knife edge, they will start to lose customers at fatal rates because of it. The paradigm must shift from one of cost saving over experience, towards one of experience first, with cost saving the end result of lower rates of failure – after all, failure costs much more than success. This is an end-to-end, organisation-wide undertaking like never before, and it requires combining the best of what humans and machines have to offer.

There is a huge prize to be won by the companies that get this right: it is possible now to improve experiences for customers, and thereby achieve revenue growth through improved conversion rates and deeper customer loyalty, all the while reducing costs at the same time as people are better supported and human errors reduced with the help of technology and AI.

What are we waiting for?