Customer service has moved from being competitive advantage to a necessity, and with more businesses automating their customer service approach to manage large volumes of tickets, global research into customer engagement suggests this could be counterproductive.

According to research from Accenture, 76 per cent of UK consumers reportedly prefer dealing with human beings over digital channels to solve customer services issues. More than half of consumers have switched companies in the past year due to poor customer service, with retailers, utility companies and internet service providers being the worst offenders.

“Companies have lost sight of the importance of human interaction and often make it too difficult for consumers to get the right level of help and service that they need,” said Rachel Barton, managing director, Advanced Customer Strategy, Accenture Strategy. “Companies wrongly assume that their digital-only customers are their most profitable, and that customer service is a cost. Consequently they over-invest in digital technologies and channels and lose their most profitable customers – multi-channel customers – who want experiences that cover both digital and traditional channels.”

The report, ‘Digital Disconnect in Customer Engagement’, surveyed 24,489 consumers across 33 countries. 1,802 UK consumers were included in the sample.

“UK companies have reached a tipping point in their customer’s digital intensity and need to rebalance their digital and traditional customer services investments if they want to improve loyalty, differentiate themselves and drive growth,” said Barton. “Companies abandon the human connection at their own risk and are facing the need to rebuild it to deliver the varied and tailored outcomes that customers demand.”

In the UK, the estimated cost of customers switching due to poor service is £221 billion. Once a provider loses a customer, 65 per cent of consumers will not go back. But there are measures companies can take to hold on to them. 82 per cent of ‘switchers’ feel the company could have done something to retain them. 73 per cent report that if companies could provide customers with better live or in-person customer service, it would have impacted their decision to switch provider.

A case for automation

“Technology is an enabler,” Szymon Chodkowski, CMO and head of digital at Outbox Group, explained, speaking to Growth Business. “Automation is not a golden solution to all problems. If the input is bad, automation will only accelerate it and you’ll get bad results even faster. It depends on how you apply automation.

“For example, automating email communication with clients can be a double-edged sword,” he explained. On one hand, automating customer service responses via email can save time and work across markets and timezones. However, as Chodkowski warned, this could be problematic if the data sets aren’t accurate. He recommends having a process in place that ensures a ‘human touch’ in assessing the accuracy of the data, as even simple mistakes like Mr instead of Ms can irk customers over email.

“When you look back from a marketing and brand perspective, some of the principles of communication between brands and customers haven’t changed from the days of Mad men! However, the way brands engage customers has and will continue to change as technology evolves. This has a huge impact on how brands communicate with customers, and simultaneously, customer expectations are also increasing.”

Chodkowski cited the prominence of mobile marketing as an example: “If a customer has a mobile phone, they certainly expect brands to be present there. Social media is now a customer care channel for brands. You can go to a brand’s Facebook page and have your ticket resolved, possibly even faster than if you were on hold waiting for a customer care officer to take your call.”

According to Chodkowski, digital platforms and marketing automation actually enable brands to appear more human. “It’s all about knowing your customers and analysing their preferences in real time. The brands that serve their customers content that is only relevant to them are the ones proactively shaping consumer expectation.

“You still need to be relevant to the customer. You need to be personal and emotional. Technology is a medium that helps brands do all this in a smarter, precise and efficient way. It starts with having the right data in the right place.”

Is there a skills gap?

Government figures suggest that more than one in three job applicants during 2015 lacked appropriate customer management skills and, of those already in the labour market, 36 per cent have failed to improve performance due to inappropriate training.

In the UK, the estimated cost of customers switching due to poor service is £221 billion.

The Institute of Customer Service, the UK’s independent professional body for customer service – is launching an academy offering customer service training aimed at front-line staff, managers and leaders. It will also help employers respond to the changing demands of UK consumers, who identified employee attitude, behaviour and competence as the factors most likely to affect repurchase and recommendation decisions.

The new academy expects to help an extra 3,500 employees directly in its first year of operation and predicts that this will increase to more than 10,000 UK employees by 2019.

Related: How to make your customer service soar

Jo Causon, CEO of the Institute of Customer Service, says: “With 70 per cent of the UK’s workforce employed in customer facing roles, their ability to meet consumers’ demands has a direct impact on UK GDP.  Customers are increasingly suggesting that staff attitude and behaviour is more important to them than it was five years ago.  At the same time, employees are asking for help so they are better equipped to handle their customers’ demands.”

What about a chief customer officer?

According to new analysis by customer management consultancy PeopleTECH, there is a lack of senior level focus on customer experience among both high growth firms and more established companies.

“As high-growth companies scale so quickly, the customer experience is something that is often overlooked with so many other business priorities to address,” said Mike Hughes, managing director at PeopleTECH. “That’s why it is so important to have someone in a senior role to make sure that doesn’t happen, to keep reinforcing the importance of customer experience and to communicate the impact that it can have on the bottom line.”

No high-growth firm on the FTSE AIM 100 has a chief customer officer (or equivalent) on the board and only 2 per cent have someone on the board with a specific customer-focused remit.

“Not having a chief customer officer on the board or even the senior management team, does not necessarily mean that organisation is not focused on providing a good customer experience but the sheer lack of numbers doing so would suggest that many brands are happy to talk about customer experience but are less willing to commit senior resource to it,” Hughes added.

“How can a company exhort its employees to put the customer first if there is no one at a leadership level taking personal responsibility for that?”

The analysis revealed just six FTSE companies that had a chief customer officer or equivalent on their board and on their senior management team or executive committee:

• Direct Line Insurance Group
• easyJet
• International Consolidated Airlines Group
• Lloyds Banking Group
• Marks & Spencer Group
• Severn Trent

Only one firm – Smart Metering Systems – did so on the FTSE AIM 100.