Businesses Failing to Address Root Causes of Customer Experience Issues, IFS Study Finds

Jun 30, 2021 • Newsfield service managementIFSLeadership and StrategyGLOBALcustomer experience

Businesses are missing out on a significant opportunity to use technology to fix internal processes and address the root causes of customer experience issues in the wake of the pandemic, research from enterprise software specialist IFS has today revealed.

The global study, which surveyed 1,700+ executives and 12,000+ consumers, shows that businesses understand software has a key role to play in consistently delivering positive outcomes, but that current approaches to customer experience do little more than wallpaper over the cracks, instead of identifying and addressing systemic problems in their operations.

Although businesses claim to pay close attention to customer service, the inflection points that occur throughout the lifecycle of their operations and encompass processes, technology solutions, and human coordination are even more important to a positive customer experience – but these are far too frequently overlooked. It is only with careful orchestration of these components that companies can deliver a quality ‘Moment of Service’, in which everything comes together to create a positive result for a customer.

29% of managers don’t take action on known operational issues, while 18% are too busy to report issues not considered urgent

This orchestration is only possible when the technological foundations are in place to provide visibility of these inflection points. Only then can businesses take the appropriate action to ensure they delight, and don’t disappoint, their customers. Indeed, some 85 percent of businesses said that their enterprise software helped them measure performance and act on issues at these inflection points to affect the end customer outcome.

However, IFS’s research also uncovered that while 79 percent of businesses have invested time and resources in identifying where these inflection points are, when problems are identified nearly a third of managers (29 percent) admitted to reporting them but not taking any action. Furthermore, some 18 percent revealed they were too busy to report issues unless urgent, while just 15 percent said they proactively look to preempt problems.

Despite the majority of companies (66 percent) investing upwards of $250,000 each year evaluating the customer experience through Net Promoter Scores, reviews, and customer satisfaction surveys, it is clear that unless they resolve these issues when they find them, customers are unlikely to see a meaningful change in their experience. Indeed, 82 percent of respondents were unable to recall a single positive example of a recent frictionless customer experience. This gap between understanding and acting is a business risk that few can afford.

For enterprises that fail at the moment of service, the ramifications are significant. A quarter of consumer respondents stated they would never engage with a brand again after just one bad experience, while over half (52 percent) would abandon a company after two to three. IFS also sought to examine the impact of negative experiences on wider brand perception and uncovered that 58 percent of consumers are very likely or somewhat likely to share their negative perceptions with their network, highlighting how easily a bad interaction can be amplified.

90% of businesses now reengineering operations to ensure better customer experiences

However, it’s not all doom and gloom. Over half (52 percent) of consumers are inclined to leave a positive review, underscoring just how much can be gained by focusing on delivering an exceptional customer experience.

To ensure they’re delivering the optimal customer experiences that breed this kind of advocacy, businesses need to rearchitect themselves to remove pain points and streamline operations, rather than trying to talk their way out of issues they walked themselves into. Investing in the right enterprise technology, that enables them to not only address current problems, but adapt to emerging conditions will be key to consistently delivering positive outcomes for customers and a powerful competitive differentiator for organizations.

“When it comes to delivering a positive customer experience, businesses have a limited opportunity to get it right. And if they neglect to assure every single inflection point, they are gambling with their outcomes,” IFS Chief Customer Officer Michael Ouissi said. “There are many points where you can either delight or disappoint a customer across the value chain and it is clear from these findings that consumers are willing to voice their opinions either way. As more and more businesses look to service provision as a key competitive differentiator, running the right enterprise software—engineered for the moment of service and which is able to orchestrate the multitude of people, assets and customers—will separate the winners from the losers.”

With 90 percent of businesses stating they have reengineered or are reengineering their business to ensure customer touchpoints and stages come together for better moments of service, it is vital that companies ensure processes are optimized across each of these inflection points to mitigate issues and fuel growth.

IFS believes a composable enterprise approach, which harnesses a combination of packaged functions and technologies to derive data-driven insight and deliver positive outcomes, will be key to delighting customers and creating competitive advantage, but businesses need to move quickly to seize this opportunity.

Download a copy of the report Fixing the fundamentals: Understanding new business models and opportunities in the wake of Covid-19.

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