The Truth Behind the Social Media Hype
Announcement posted by Fifth Quadrant 13 Nov 2012
Australian based organisations struggle to engage customers through emerging channels: social media and smartphone apps
Sydney: 13 November 2012 - Despite considerable industry hype around social media, promoted primarily by IT vendors, research results reveal that Australian based organisations are struggling to effectively engage with their customers using emerging channels of social media and smartphone apps.
A study involving 500 consumers was released this week by leading Customer Experience research company, Fifth Quadrant Pty Ltd. The study revealed that only 16% of Australian consumers have ever used social media for a customer service enquiry (significantly higher amongst Gen Y consumers- 29%) and less than one in 10 Australians have used this channel for customer service in the last three months.
The reasons participants in the study stated for not using a social media channel included: 32% saying that it is not personal, 30% stating that they did not know that they could; 30% noted that they were concerned with security issues; 22% stated that they thought it would take longer than a phone call and 20% said they did not think it would be a good experience.
Only 15% of Australian consumers have ever used a smartphone application for a customer enquiry (this is currently 20% amongst Gen Y), and only 8% of consumers have used this channel in the last three months.
The reasons participants in the study stated for not using a smartphone app channel included: 41% stating that they did not know that they could; 21% stated that they thought it would take longer than a phone call; 16% thought that it would make the process slower to talk to a customer service representative; 15% said they did not think it would be a good experience and 13% said that they did not think it would be easy to use.
Dr Catriona Wallace, Managing Director of Fifth Quadrant stated, “Despite all we hear about the strong traction social media and mobile applications are having with Australian businesses we are yet to see the Australian consumer base really embrace these channels for customer service. Consumers are still concerned about security, privacy and query resolution levels in these new channels”
The research reports that compared to the levels of first contact resolution (where a customer only needs to contact an organisation once to have their query resolved) by phone call, which is typically about 78% of queries being handled in one contact, social media and smartphone apps have significantly lower levels of first contact resolution: 59% for social media and 51% for smartphone apps. This means that about half of all customers who use these new channels will have to make a phone call or contact the organisation using another channel to have their query resolved, thereby significantly increasing the cost of the interaction and reducing the customer’s satisfaction.
Dr Wallace commented, “There is no question that social media and mobile channels will be important in the next few years as the percentage of consumers who use these channels for customer service doubles year on year. Rather, it is a question of how effectively organisations address the supporting business processes and skill levels of social media customer service representatives.”
Fifth Quadrant’s 2012 Customer Service Industry Market Report (n=120) reveals that 69% of Australian based organisations have already implemented social media as a channel for customer service. Twenty-three per cent of organisations have implemented smartphone apps for customer service.
“The challenge for Australian business is that they typically do not consider Multi-channel Customer Experience as a strategy, hence these new channels lack integration, they do not have accurate revenue and cost models and there is poor data analytics. This has resulted in a sub-optimal channel deployment and as the research shows, ultimately, a sub-optimal customer experience.” Dr Wallace commented.
Further research findings
Key findings from Fifth Quadrant’s 2012 Customer Service Industry Market Report (n=120) include:
Social Media:
1. In Australia, the predominant share of the 22 million daily customer interactions handled by contact centres is still handled by live agents (52%). Despite industry increasing the implementation of social media as a customer service channel, Share of Contact Handling by Social Media channels is 0.2%
2. Amongst organisations that offer social media as a channel for customer service, 67% report that the marketing department is responsible for managing it.
3. 63% of organisations in the study have only had social media as a channel for customer service implemented for 1 to 2 years.
4. Amongst organisations that currently have social media as a customer service channel only 29% reported their contact centre has the ability to escalate a social media query through to a customer support application that links through to an agent.
5. Past three months usage of social media as a customer service channel has doubled in the past 12 months (4% 2011; 8% 2012).
6. The proportion of consumers who believe they will be using social media more often in the future has also nearly doubled from 4% in 2011 to 7% in 2012.
7. When asked whether they had received a response from an organisation via a Social Media network to comments they had made through Social Media, only 7% of consumers reported that they had. About 5% of consumers claim to have received essential information posted via a Social Media network. 14% of consumers report they have received information from an organisation via social media about new products and services.
Smartphone Apps:
1. Amongst organisations that offer smartphone apps as a channel for customer service 50% report that the marketing department is responsible for managing it, with a further 33% reporting that IT is responsible.
2. 50% have only had smartphone apps as a channel for customer service implemented for one to two years, with 33% reporting smartphone app has been available for less than 12 months.
3. Amongst organisations that do not currently offer smartphone app as a channel for customer service, 25% report they have no plans to.
4. Further to the existing 8% of consumers who have used a smartphone app for customer service, a further 33% of consumers report that they are likely to use a smartphone app for a customer service enquiry in the next 12 months.
5. Amongst Gen Y consumers, 29% report that they will be using smartphone apps for customer service issues more often in the next 1-2 years. This is significantly higher compared to Baby Boomer (8%) and Silent (4%) generations.
About Fifth Quadrant
Established in 1998, Fifth Quadrant Pty Ltd is a Customer Experience Management Consultancy and Analyst organisation. We provide management consulting, service industry reports, customer experience design, social media strategy, operational improvement programs, customer research, customer analytics programs and executive training programs. We work across contact centre, face-to-face, online, social media, smartphone apps, correspondence and video service channels.
A study involving 500 consumers was released this week by leading Customer Experience research company, Fifth Quadrant Pty Ltd. The study revealed that only 16% of Australian consumers have ever used social media for a customer service enquiry (significantly higher amongst Gen Y consumers- 29%) and less than one in 10 Australians have used this channel for customer service in the last three months.
The reasons participants in the study stated for not using a social media channel included: 32% saying that it is not personal, 30% stating that they did not know that they could; 30% noted that they were concerned with security issues; 22% stated that they thought it would take longer than a phone call and 20% said they did not think it would be a good experience.
Only 15% of Australian consumers have ever used a smartphone application for a customer enquiry (this is currently 20% amongst Gen Y), and only 8% of consumers have used this channel in the last three months.
The reasons participants in the study stated for not using a smartphone app channel included: 41% stating that they did not know that they could; 21% stated that they thought it would take longer than a phone call; 16% thought that it would make the process slower to talk to a customer service representative; 15% said they did not think it would be a good experience and 13% said that they did not think it would be easy to use.
Dr Catriona Wallace, Managing Director of Fifth Quadrant stated, “Despite all we hear about the strong traction social media and mobile applications are having with Australian businesses we are yet to see the Australian consumer base really embrace these channels for customer service. Consumers are still concerned about security, privacy and query resolution levels in these new channels”
The research reports that compared to the levels of first contact resolution (where a customer only needs to contact an organisation once to have their query resolved) by phone call, which is typically about 78% of queries being handled in one contact, social media and smartphone apps have significantly lower levels of first contact resolution: 59% for social media and 51% for smartphone apps. This means that about half of all customers who use these new channels will have to make a phone call or contact the organisation using another channel to have their query resolved, thereby significantly increasing the cost of the interaction and reducing the customer’s satisfaction.
Dr Wallace commented, “There is no question that social media and mobile channels will be important in the next few years as the percentage of consumers who use these channels for customer service doubles year on year. Rather, it is a question of how effectively organisations address the supporting business processes and skill levels of social media customer service representatives.”
Fifth Quadrant’s 2012 Customer Service Industry Market Report (n=120) reveals that 69% of Australian based organisations have already implemented social media as a channel for customer service. Twenty-three per cent of organisations have implemented smartphone apps for customer service.
“The challenge for Australian business is that they typically do not consider Multi-channel Customer Experience as a strategy, hence these new channels lack integration, they do not have accurate revenue and cost models and there is poor data analytics. This has resulted in a sub-optimal channel deployment and as the research shows, ultimately, a sub-optimal customer experience.” Dr Wallace commented.
Further research findings
Key findings from Fifth Quadrant’s 2012 Customer Service Industry Market Report (n=120) include:
Social Media:
1. In Australia, the predominant share of the 22 million daily customer interactions handled by contact centres is still handled by live agents (52%). Despite industry increasing the implementation of social media as a customer service channel, Share of Contact Handling by Social Media channels is 0.2%
2. Amongst organisations that offer social media as a channel for customer service, 67% report that the marketing department is responsible for managing it.
3. 63% of organisations in the study have only had social media as a channel for customer service implemented for 1 to 2 years.
4. Amongst organisations that currently have social media as a customer service channel only 29% reported their contact centre has the ability to escalate a social media query through to a customer support application that links through to an agent.
5. Past three months usage of social media as a customer service channel has doubled in the past 12 months (4% 2011; 8% 2012).
6. The proportion of consumers who believe they will be using social media more often in the future has also nearly doubled from 4% in 2011 to 7% in 2012.
7. When asked whether they had received a response from an organisation via a Social Media network to comments they had made through Social Media, only 7% of consumers reported that they had. About 5% of consumers claim to have received essential information posted via a Social Media network. 14% of consumers report they have received information from an organisation via social media about new products and services.
Smartphone Apps:
1. Amongst organisations that offer smartphone apps as a channel for customer service 50% report that the marketing department is responsible for managing it, with a further 33% reporting that IT is responsible.
2. 50% have only had smartphone apps as a channel for customer service implemented for one to two years, with 33% reporting smartphone app has been available for less than 12 months.
3. Amongst organisations that do not currently offer smartphone app as a channel for customer service, 25% report they have no plans to.
4. Further to the existing 8% of consumers who have used a smartphone app for customer service, a further 33% of consumers report that they are likely to use a smartphone app for a customer service enquiry in the next 12 months.
5. Amongst Gen Y consumers, 29% report that they will be using smartphone apps for customer service issues more often in the next 1-2 years. This is significantly higher compared to Baby Boomer (8%) and Silent (4%) generations.
About Fifth Quadrant
Established in 1998, Fifth Quadrant Pty Ltd is a Customer Experience Management Consultancy and Analyst organisation. We provide management consulting, service industry reports, customer experience design, social media strategy, operational improvement programs, customer research, customer analytics programs and executive training programs. We work across contact centre, face-to-face, online, social media, smartphone apps, correspondence and video service channels.