Customer service in Asia falls well short of rising consumer expectations

Wednesday, 13 October 2010 23:05 -     - {{hitsCtrl.values.hits}}

New study suggests companies’ failure to prioritise customer service improvement is a major missed opportunity

Expectations of customer service are rising across Asia as consumers grow richer, are better informed and travel more. But businesses, although aware of rising expectations, are failing to meet demands.

These are among the findings of Greater expectations: Keeping pace with customer service demands in Asia Pacific, a new report from the Economist Intelligence Unit, commissioned by DHL. The report is based on two wide-ranging surveys conducted in 10 markets across Asia: one of over 300 senior executives and another of over 700 consumers.

 Companies in Asia are not putting sufficient emphasis on customer service. Over half of the companies in the survey invest in customer service only after development of their core product, and one-third say they invest in customer service only when they see a real need. However, the vast majority of Asian consumers polled (76%), say that customer service should always be a company’s top priority. Clearly, many firms in Asia may have much to gain by raising the priority of customer service initiatives.

 “The gap between what companies are providing and what consumers say they want is an opportunity,” says Sudhir Vadaketh, editor of the report. “As competition in the region intensifies those companies who put more emphasis on customer service should gain an edge.”

 Other findings of the report include the following:

=Price is no longer the only factor in purchasing decisions. In parts of Asia, companies are still focused on price, believing that it is the most important factor in consumer purchasing decisions. But many consumers are willing to pay for better service.  For instance, half of the Indonesian firms surveyed feel that their customers are concerned only about price, not service. However, less than one-quarter of the Indonesian consumers surveyed agree.

=Rising expectations are driven by information and competition, not income, suggesting that expectations even in lower-income countries will rise quickly. Only 29% of the executives surveyed think that incomes are behind rising expectations for service. Instead, 72% say the shift is due to consumers having more information. Nearly 70% of corporate executives say increased competition is the major driver of change. But while there may be more products and services on the market, this is not necessarily leading to better customer service. Some 52% point to increased online connectivity. This suggests that in order to provide the best service, companies need to carefully monitor consumer awareness—not just income levels.

=Customer service, like products, should be tailored to individual markets. Consumers in different parts of Asia have quite different service expectations. For instance, before buying a product, Thai consumers value courteous, informed staff much more highly than do Malaysian or South Korean consumers. However, only about half of the companies surveyed make the effort to differentiate their service to suit local customer profiles in different markets.

=Call centre service is fine…if done well. The majority of Asian consumers surveyed have no fundamental objection to call centres—provided they are easy to use and provide quick results. However, the use of call centres may not do much to enhance customer satisfaction. Less than one-third of companies surveyed say that call centres have had a big impact on customer satisfaction.

=The emphasis on online communication may be misplaced. One-third of our corporate survey respondents plan to invest in a better online presence. However, few regard it as very important to their customers, and indeed, only a minority of consumers say they value it. Although establishing an online presence may be important for other purposes, the survey indicates that it may not do much for customer service satisfaction.

=Foreign firms can compete on service. When asked if Asian or Western companies provide higher standards of customer service, consumers in Asia are divided, with 26% choosing Asian, 28% choosing Western, and 46% undecided. In addition, only 22% of consumers think foreign companies cannot deliver customer service to the same level as local ones. This suggests that non-Asian companies venturing into the region generally have been able to adapt and satisfy local demands.