The State of the Customer Service Industry

The customer service industry is thriving and expected to continue growing. This is due to several factors, including the increasing demand for goods and services, heightened customer expectations, and the impact of technology on customer interactions.

• In 2020, 58% of customers in the United States contacted customer service within the past month.
• 54% of global customers have higher expectations for customer service today than they did a year ago.
• The customer experience management market is expected to grow at a compound annual growth rate of 17.5% from 2021 to 2028.

The Importance and Impact of Customer Service

Excellent customer service is more than just a nice-to-have; it's a key differentiator that significantly impacts revenue and brand loyalty. Customers are more likely to do business with companies that provide good customer service, and they are willing to pay more for a guaranteed positive experience.

• 60% of customers in the United States do more business with companies due to good customer service.
• 80% of customers place the same emphasis on customer service as they do on product quality.
• Businesses can grow revenues between 4% and 8% above their market by prioritizing better customer service experiences.

The Cost of Poor Customer Service

Poor customer service can be devastating for businesses. A single negative experience can ripple through the customer base, leading to lost customers, negative reviews, and reduced brand loyalty.

• 56% of global customers have stopped doing business with a brand due to a poor customer service experience.
• Only one in five consumers will forgive a bad experience at a company whose customer service they rate as “very poor.”
• 13% of customers tell 15 or more people if they’re unhappy with a brand due to a poor customer service experience.

Understanding Customer Expectations and Priorities

Customer expectations are constantly evolving, making it crucial for businesses to stay informed about what their customers truly value. Understanding customer priorities helps you focus on the areas of customer service that matter most.

• 90% of consumers consider issue resolution as their most crucial customer service concern.
• 90% of customers rate an “immediate” response to a customer service inquiry as “important” or “very important.”
• 63% of consumers expect businesses to know their unique needs and expectations.
• 68% of customers expect brands to demonstrate empathy.
• 53% of consumers expect connected customer service experiences.
• 72% of consumers expect agents to already know who they are, what they’ve purchased, and have insight into their previous engagements.

Common Customer Frustrations

Customer frustrations often stem from slow response times, having to repeat information, and lack of knowledge or empathy from customer service representatives.

• 33% of customers are most frustrated by having to wait on hold. 33% are most frustrated by having to repeat themselves to multiple support reps.
• 65% of customers say they do often have to repeat or re-explain information to different representatives.
• 84% of consumers are frustrated when the agent does not have information.
• 63% of customers say brands don’t generally demonstrate empathy.
• 52% of customers describe most service interactions as fragmented.
• 53% of consumers believe brands don’t take action on the feedback they provide.

Choosing the Best Customer Service Channels

With the rise of digital communication, customers have a wide range of options for reaching out to customer service. While email and phone remain popular, online chat, mobile apps, and social media are becoming increasingly relevant. It's essential to choose the channels that best suit your customers' needs and preferences.

• Email
• Phone
• In-person
• Online chat
• Mobile apps
• Messenger apps
• Text/SMS
• Online portals
• Video chat
• Social media

The Role of Social Media Customer Service

Social media is gaining prominence as a customer service channel, especially among younger generations. Responding promptly to social media inquiries is crucial for maintaining a positive brand perception. Businesses must also monitor social media for mentions of their brand and customer experiences, even if they are not directly addressed to the company.

• 74% of millennials report that their perception of a brand improves when it is clear the company responds to customers’ social media inquiries.
• 48% of consumers expect a response to social media questions and complaints within 24 hours.
• 75% of people aged 55 and over do not believe social media is an effective channel for customer service, but 65% of people aged 18-34 DO believe it is an effective channel.
• 36% of consumers actively share details of their customer service experiences. And half of those who share do so on social media.
• One in two millennials has complained about a brand on social media.

The Importance of Self-Service and Knowledge Bases

Customers increasingly prefer self-service options to resolve issues quickly and efficiently. Providing a comprehensive knowledge base with FAQs, how-to videos, and user guides empowers customers to find solutions independently, reducing the burden on customer service agents.

• 90% of consumers expect an online portal for customer service.
• 32% of customers “always” try to resolve their issue before reaching out to customer service.
• 77% of consumers report having used a self-service support portal.
• Customers prefer knowledge bases over all other self-service channels.