Service standards – costing businesses

Recent experiences with, and expectations of poor customer service are the primary reasons for decreasing consumer traffic counts to specific Australian shopping centres, precincts and stores.

Poor service was also nominated by a majority of consumers as the dominating factor of declining purchases from select outlets, indifferent responses to mass media and online advertising, and to a fall-off in the appeal and effectiveness of loyalty cards.

A significant majority of participants in 18 focus groups conducted in six state capital cities during the period 1-14 July, contended that service standards in 2018 were lower than those experienced in 2017 and 2016.

Key findings:

Inadequate numbers of parking bays was a greater influence than poor in-store service experiences in decisions to not visit specific shopping centres, precincts and city business districts.

Poor in-store service experiences were major influences for consumers to consider and to undertake online purchases.

Poor, slow and complex purchase-return policies and procedures were identified as the major concerns about online purchases.

Most sectors suffer from a widespread perception that access to, and responses to initial contacts (by phone, online and personal visits) are poor, annoying and frustrating.

Professional services, including accounting, law, medicine and financial planning were not among the 20 most nominated sectors which were of concern when participants related to poor and low falling customer service standards.

Energy, health insurance and public utility were the most commonly referred sectors in relation to pricing, cost increases, and value.

It is evident from the research findings that expectations of poor customer service are keeping Australian consumers away from shopping centres, retail precincts and stores. They are staying at home, going online to scan and to buy, with expectations of better service, cheaper prices and convenient home deliveries.

Pedestrian monitoring systems at prime retail locations throughout Australia are consistently reporting traffic counts of consumers are down between 4 and 5%.

Poor customer service is costing business volume sales and profits, compounding the prevailing economic circumstances, and contributing to low levels of consumer confidence.

Background information:
Researchers did not nominate, or prompt focus group participants in the nomination of specific issues, sectors or entities in this series of focus groups, which studied customer service standards in general.

Consumers identified the sectors which most consistently fell short of expectations were:
Department stores
Telecommunication companies
Electricity/power/energy utilities
Insurance: house/vehicle/health
Home building maintenance
Government departments

About the author

Barry Urquhart

Barry Urquhart, Business Strategist Marketing Focus

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