SINGAPORE — Zendesk’s landmark annual research has highlighted the potential for businesses to drive business success with a focus on customer experiences but has also uncovered a gap between consumer expectations and company actions when it comes to customer service. The global Zendesk (NYSE: ZEN) Customer Experience (CX) Trends Report 2022 reveals that 68% of Asia Pacific (APAC) consumers feel as though customer service is an afterthought for businesses – despite 80% reporting that the quality of customer service they receive impacts their purchase decisions.
The need to close the gap between these expectations and CX delivered has never been more urgent – especially as more customers are vocal about their increased expectations, and 71% of those in APAC say they would switch to a competitor after one bad customer service experience. The opportunity cost for many is nothing short of revenue loss and missed opportunities for growth.
“Businesses cannot afford to take a transactional approach to their relationships with their customers. Customer service is now a key differentiator, but this year’s report reveals some gaps exist between expectation and delivery,” said Adrian McDermott, Chief Technology Officer, Zendesk. “Customers are noticing this gap and voting with their business – and that’s perhaps the clearest signal to businesses that change needs to happen, and fast.”
“The increasing demand for quality customer experience is evident here in APAC. Businesses that leverage the right strategies to deliver exceptional customer experience will be able to set themselves apart from competitors and grow their customer relationships,” added Wendy Johnstone, Chief Operating Officer, APAC, Zendesk.
Zendesk’s report draws on input from customers, agents, customer service leaders, and business leaders from across 21 countries including Australia, Japan, India, Singapore, and Korea. Data was also gathered from more than 97,500 Zendesk customers who participated in the company’s Benchmark program.
Consistent Truths: Customer Service Can Drive Growth
Of the APAC businesses surveyed, 69% agree there is a direct link between customer service and business performance – with 60% estimating that customer service has a positive impact on business growth. However, when broken down by country, just 67% of Singapore businesses agree with this direct link, lagging behind other markets such as India (88%) and Australia (77%).
Beyond delivering a single solution-based interaction with the consumer, businesses need to take the opportunity to drive customer engagement and deepen the relationship. However, customer engagement in APAC is up by only 4% from the previous year, signifying more work needs to be done to better serve customers. Singapore experienced the slowest growth in customer engagement, up by only 1%.
This report also reveals that customer expectations can drive or stifle growth plans. As consumers spend more online, a majority say their customer service expectations have increased in the past year. Channels play a big part in meeting these increased expectations and particularly, being where the customer is. However, more than half of the APAC (51%) companies surveyed did not have a strategic plan for customer service over the immediate to medium term.
Key insights:
- 71% of APAC consumers say their customer service expectations have increased over the past year.
- 94% of APAC consumers say they are willing to spend more with companies who personalise the customer service experience. This is even higher for Singapore consumers (96%).
- 93% of APAC consumers say they are willing to spend more with companies that offer them the chance to find the answers they need themselves.
- Companies are evenly divided between those who still view CX as a cost centre (33%) and those who believe it is a revenue-generating engine for growth (34%).
The Agent X-Factor
Increased expectations leads to increased pressure on agents, who are part of the front line. In fact, Zendesk’s research found that 68% agree that customer service agents are essential to driving sales with 73% of APAC consumers saying they are open to product recommendations from service agents.
When it comes to resolving issues, almost half the consumers surveyed (44%) are looking for agents who are helpful and empathetic – and this often translates into a positive experience. However, many businesses have yet to recalibrate their view of customer service as a cost center, meaning investments in optimising the function have not kept pace with growth – let alone with increasing customer expectations. While a majority of businesses acknowledge customer service agents as being pivotal to customer retention, only 16% of APAC agents are extremely satisfied with their workloads.
Agent empowerment is a clear focus area for 2022, as agent burnout continues to be a challenge. While just 20% of APAC agents are extremely satisfied with the quality of training they receive, 75% of APAC customers feel that businesses need to improve agent training. This also includes better performance metrics, clear advancement opportunities, and, fundamentally, more respect.
Closing Gaps and Mapping Paths To Growth
While 68% of APAC business leaders say their organisation views customer service as a critical business priority, close to half (47%) report that it’s still not owned by the C-suite. While the insights clearly indicate a business case for investments in customer experience, this isn’t necessarily being followed through with executive sponsorship or the right tools or programs, such as training for agents. Alongside this is the need for customer service metrics to be mission critical and reviewed with the appropriate frequency and gravitas. Sixty percent of business leaders say the ROI of their organisation’s spend on customer service over the past 12 months has been positive. However, only 23% strongly agree that customer service spending has kept pace with company growth.
“The business case for customer service is clearer than ever and getting buy-in from the top is a critical first step. Getting this engagement relies on evolving the key metrics – look beyond CSAT and identify the broader business impact that can tell a compelling story,” McDermott adds. “This year’s findings bring into sharp focus the need for there to be a more concerted effort across the organisation – including better integration of systems and a regular review of metrics. In short, let the insights lead you.”
Additional Resources
For more information, download the report, CX Trends 2022 here
Access the interactive report here
