SOURCE: Genesys Telecommunications Laboratories, Inc., an Alcatel-Lucent company

Genesys Telecommunications Laboratories, Inc., an Alcatel-Lucent company

November 17, 2009 11:06 ET

Survey of 16 Countries Shows Poor Customer Service Costs $338.5 Billion per Year in Lost Business

Financial Services, Cable and Satellite TV, and Telecommunications Firms at Most Economic Risk From Poor Customer Service

SAN FRANCISCO, CA--(Marketwire - November 17, 2009) - According to a new international survey of consumers, the cost of poor customer service in 16 major industrialized economies causes businesses to lose a total of USD $338.5 billion per year when customers defect and abandon their purchases as a direct result of poor customer experiences. The hardest hit industries across all countries surveyed are financial services, cable and satellite TV providers, and a variety of telecommunications companies. The average value of each lost relationship across all countries surveyed is $243 per year. Losses were defined as transactions taken to a competitor (63% of the total) and transactions abandoned entirely (37% of the total).

The survey asked consumers their priorities and the changes most needed to improve the quality of their customer service experiences in:

Czech Republic
New Zealand
United States

While many larger economies saw greater impact, the losses were not necessarily proportionate to the size of the economy. For example, Brazil and Mexico represented two of the top four countries impacted.

In the past year financial services firms saw more than $44 billion in lost revenue. And cable and satellite TV providers alone suffered more than $37 billion of losses. Wireless carriers and Internet service providers each had $36 billion in lost revenue. Landline carriers also lost $33 billion.

Best and Worst Rated Industries

Some industries that were hard hit, like financial services, also had some good news. Financial services companies were viewed more positively than negatively, while other industries, such as telecommunications, were not as fortunate: negative sentiment outweighed positive sentiment by a two-to-one ratio. Consumers were asked to select the industries that did the best and worst job of customer service. The consumer's choice for best customer satisfaction with industry is shown in blue, and worst industry is shown in red. The most positive ratings are for consumer products, travel/hospitality, and financial services. The most negative ratings are for telecommunications and government.

Survey Sample

A total of 8,880 consumers, at least 500 from each country, were selected from all age and income groups and surveyed for the report, "The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement." Consumers were asked about the frequency of their interactions with businesses via the Web, through contact centers and with their mobile devices. They also were asked to identify the impact of those interactions on their purchasing decisions.

Reasons Consumers Leave

Consumers across all countries cited key reasons that they leave. Assisted service is well developed, with the overwhelming majority of consumers saying their most satisfying experience occurred because of a capable and competent customer service representative. However, self-service that is not intelligently integrated with assisted service is a key area of concern. Consumers feel the most significant root causes of poor service are:

--  Being trapped in automated self-service
--  Being forced to wait too long for service
--  Repeating themselves
--  Representatives that lack the skills to answer their inquiry

Some interesting differences occur regionally. For example, in many European locales, including Germany, the Netherlands, France, the United Kingdom and the Czech Republic, a significant portion of consumers said one of their greatest sources of frustration was being unable to reach customer service without paying a charge for the call: 29% of consumers in Germany said so; and in the Netherlands 25% mentioned this. Nearly 10% of Chinese consumers also cited this as a source of frustration.

This survey represents the first large-scale attempt to place an economic value on the lost revenue from customer service across all channels when businesses do not measure up to consumer expectations. The 28-question survey of consumers was conducted by Greenfield Online. The survey was sponsored by Genesys Telecommunications Laboratories, Inc., an Alcatel-Lucent company (Euronext Paris: ALU) (NYSE: ALU), in collaboration with industry analysts at Datamonitor/Ovum. The survey group represented virtually every age and income bracket of consumers in the 16 countries surveyed. Datamonitor/Ovum reviewed the consumer survey data in conjunction with its proprietary contact center models to produce the results.

"With the rise of social media and increased consumer awareness the cost of customer frustration continues to grow," said Daniel Hong, Lead Analyst of Customer Interaction at Ovum. "We're advising enterprise businesses to develop cohesive strategies that straddle all channels of customer communication. The difference between delivering exceptional customer service and merely providing acceptable service is pronounced. Differentiating on service, especially in service-centric industries, such as finance and telecommunications, is how enterprises can retain customers in today's challenging business climate."

Common Wish Lists

There were some broad areas of agreement among consumers from many regions. Three common threads emerged among all countries. First, consumers are demanding better integration between self-service and assisted service, including voice self-service and eServices. The most requested improvements in all countries were to be able to start in voice self-service or the Web and get live assistance from an agent, and to start in e-mail and have better integration with agent-assisted service. In other words, "Don't ask me twice."

Most Requested improvements

When asked what they would most like to see companies deploy to improve service, 40% chose human service, but more than half of consumers chose at least one new communication channel among their top choices. In other words, "Treat my interactions as a conversation." Over 18% selected as their first choice better integration of communication channels, 16% chose enriched content such as video, and 16% chose Web assistants or avatars.

Greatest Sources of Customer Satisfaction

Consumers also were asked to identify the factors that make the biggest difference in improving satisfaction levels. According to the data, consumer satisfaction increases when companies meet four key needs:

--  Competency
--  Convenience
--  Proactive engagement
--  Personalization

Proactive outreach emerged as an area in which consumers want greater engagement. More than 86 percent of consumers defined proactive engagement as a "strong benefit" or would "welcome proactive assistance" when stuck on the Web or in some form of self-service.

For a complete copy of "The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement" survey, please send a request to:

About Genesys Telecommunications Laboratories, Inc.

Genesys is the leading provider of software to manage customer interactions over the phone, Web and mobile devices. The Genesys software suite connects customers with the right resources -- self-service, assisted-service and proactive outreach -- to fulfill customer requests, optimize customer care goals and efficiently use resources. Genesys software directs more than 100 million customer interactions every day for 4,000 companies and government agencies in 80 countries. These companies and agencies can leverage their entire organization, from the contact center to the back office, to dynamically engage with their customers. As a result, Genesys stops customer frustration, drives efficiency and accelerates business innovation. For more information, go to

About Alcatel-Lucent

Alcatel-Lucent (Euronext Paris: ALU) (NYSE: ALU) is the trusted partner of service providers, enterprises and governments worldwide, providing solutions to deliver voice, data and video communication services to end-users. A leader in fixed, mobile and converged broadband networking, IP technologies, applications and services, Alcatel-Lucent leverages the unrivalled technical and scientific expertise of Bell Labs, one of the largest innovation powerhouses in the communications industry. With operations in more than 130 countries and the most experienced global services organization in the industry, Alcatel-Lucent is a local partner with a global reach. Alcatel-Lucent achieved revenues of Euro 16.98 billion in 2008 and is incorporated in France, with executive offices located in Paris. For more information, visit Alcatel-Lucent on the Internet:

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