Service 2020: Customer service top priority for competitive business

BUSINESSES across the region will experience a fundamental change in the way they compete with one another as customer service becomes more important than both price and product quality, according to new research from accountants and business advisers BDO, written by the Economist Intelligence Unit (EIU).

The finding is one of eight ‘Megatrends’ revealed in a major new report on customer service released today and compiled from insights gathered from almost 500 business leaders across the world.

The eight trends revealed in the ‘Service 2020: Megatrends for the decade ahead’ report found that 43% of the businesses surveyed presently lack a strategy to identify problem areas in customer service, despite acknowledging it will become the new battleground when competing for custom in the future.

More than half (55%) of businesses surveyed recognised that customer service will become the primary competitive differentiator by 2020, well ahead of product quality (33%) and price (9%).

The shifting priorities are even more striking for companies in the business-to-business arena, where 57% believe customer service will become the key area of competition by 2020, an increase from less than a third (32%) presently.

Despite the perceived importance of customer service, companies are ill-prepared to face the changes to come, the report found.

Although nearly seven in 10 companies (67%) consider themselves to be better than their competitors, more than a third (37%) do not track customer feedback and 43% do not have a strategy in place to identify problem areas in customer service.

Business-to-business companies were also found to be lagging behind business-to-consumer companies in this area, with more consumer facing businesses currently having an enterprise wide system to track customer feedback and complaints and almost twice as many currently working on implementing a system.

Mark Anslow, office managing partner at BDO in the Midlands, said: “Our research reveals eight Megatrends across the breadth of customer services and points to a clear shift ahead.

“The basis on which companies compete will change markedly by 2020, with customer service set to become the new battleground. Expectations are constantly changing as customers and clients demand greater speed and a more personalised service.

“Businesses must refocus their priorities or risk losing their competitive edge in the global marketplace. We’re seeing emerging markets evolving their customer service offering to leapfrog mature markets, which as a result are in danger of lagging behind.

“Only those who effectively track data and modify their approach to customer relationship management will compete successfully on the world stage.”

As the report finds that there is still work to be done to improve service, some businesses have started to implement strategies to meet customers’ shifting demands.

Almost three-quarters (74%) are already investing in training staff to improve their customer service, whilst 61% are also upgrading customer-facing technologies such as websites and mobile channels.

The eight trends revealed in the ‘Service 2020: Megatrends for the decade ahead’ report are that global competition will drive up service standards; companies must maintain service standards in the face of ‘the need for speed’; firms must learn to use the increased transparency brought by social media to their advantage; companies must use new sources and types of data to rethink the way they track and personalise their service; good employees will remain fundamental to good service but with technology as an enabler; more firms will outsource aspects of customer service to new kinds of specialists; the rise of the mass affluent and other customer segments will force companies to find new product or service niches; and customer expectations are evolving with new technology.

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