Your Customer Service Sucks, and It's Costing You Billions

New Zealand is a nation stuck on hold, with a population of five million people waiting over 22 million hours for customer service last year.

Research from ServiceNow released last week shows that the situation is getting even worse, and wait times have increased for the second year running and are up by 13%.

This is not just frustrating; it is costing the economy. ServiceNow estimates the time spent on hold during working hours equates to NZD167 million in lost productivity.

Across the Tasman Sea in Australia, the situation is just as bad. There, the population of 26 million spent more than 107 hours on hold in 2023 to make service complaints or wait to resolve a service issue, up 11% on the previous year.

In dollar terms, ServiceNow calculates Australian lost productivity at AUD1.28 billion.

Unsurprisingly, all this time waiting on hold makes people feel like switching brands.

In Australia, ServiceNow estimates that, on average, it takes a business 5.1 days to satisfy a customer complaint. The survey found that 59% of people planned to spend elsewhere if their issue was unresolved in three days.

New Zealand businesses take even longer to respond satisfactorily, on average 5.9 days. Like their Aussie cousins, 57% of Kiwis say they’ll take their business elsewhere if it takes more than three days for satisfaction.

Failure to meet expectations

These results pose big questions about enterprises' investments in their customer service experience.

Enterprises are still failing to meet customer expectations for all the channels available to them, from call centers to emails to bots.

The omnichannel approach sounded promising until it was clear that just about all the channels were as equally frustrating as each other.

“Robots can be perceived as supportive, emotional, and hence social actors.”

People who use the old-fashioned phone wait for long periods to get through, emails go days without an answer, and chatbots often make just a token attempt at assistance before people give up.

This is undermining brands and introducing a significant risk factor around customer churn. It ultimately undermines enterprises' productivity as investments in customer relationships fail to deliver.

Next generation chatbots

In looking for a solution, improved chatbots present as the future.

Currently, the customer experience they deliver is mixed, and most people feel fobbed off if they are forced to interact with a chatbot, adding to the time wasted and feelings of frustration.

With Generative AI, however, there is a future in which chatbots can be helpful and make more than a token contribution to customer experience.

Chatbots from Google, Microsoft, Amazon and OpenAI are all reportedly undergoing major upgrades. At the same time, a new rival from Anthropic—called Claude—is claimed to be able to ingest 200,000 tokens at once, four times GPT-4’s limit.

At Google, the gen AI chatbox Bard is getting an update and will now be powered by Google’s newest and most advanced AI model, Gemini, which comes in three sizes and can be on anything from a mobile device to a data center.

While upgrading Bard with Gemini this year, Google plans to introduce Bard Advanced in 2025, giving users access to improved AI models.

Google says the result will be a chatbot that is better at understanding and summarizing content, reasoning, brainstorming, writing and planning.

Microsoft is giving its chatbot Copilot, which was previously known as Bing Chat, a new brain in the form of GPT-4 Turbo from OpenAI.

Microsoft is also adding a deep search capability for more in-depth search requests. If questions are vague, deep search will offer suggestions for refining the query.

Elon Musk is in dispute with OpenAI after reportedly trying to take over the not-for-profit organizations, but that hasn’t stopped him from continuing to get into AI.

His startup, xAI, is working on an improved version of the “Grok” chatbot, which will have better math-solving abilities and a better understanding of longer texts.

The new Grok 1.5 version is passing its math and coding tests with flying colors and will soon be available for early testing to Grok users and on the X social media platform.

A relatively new challenger in this space is ClaudeAI from Anthropic, which has just been released as an iOS mobile app.

Users can have conversations with Claude synced across devices and upload files and images straight from the image gallery.

In-store bots

That is a consumer example, of course, but it is clear that the next generation of chatbots is coming, and we can only hope they are an improvement.

Most consumers are comfortable not engaging with a human customer service employee in every interaction. They have put their faith in enterprises to deliver on their investments in the omnichannel.

In-store robots will likely soon be part of the omnichannel ecosystem. Australia’s two biggest retailers, Woolworths and Coles, are experimenting with them and using AI technology.

Professor Sanjit Roy at Edith Cowan University in Western Australia, has published a research paper on robot service. He says Australians are willing to give retail robots a chance, but they must deliver. If they are helpful, then people will trust them, and that trust will increase over time.

“A series of flawless transactions ultimately leads to a situation or a state of inertia where customers look forward to interacting with the social robots,” Roy said.

“Social robots have been shown to act as entertainers, social enablers, friends, and mentors to customers, which suggests that robots can be perceived as supportive, emotional, and hence social actors.”

The problem is that most interactions are not flawless right now, and instead of looking forward to these interactions, the idea fills most people with dread.

Everyone on both sides of the commercial equation can only hope that the next generation of chatbots can change that.

Stress levels are at stake, customer churn and brand values are at risk, and—as the ServiceNow report shows—so is the productivity of nations.

Image credit: iStockphoto/Prostock-Studio