High Tech Gets Poor Grade on Enterprise Customer Service

Back in February, I wrote about an Accenture study finding that telecom carriers were out of touch with customers and losing money as a result. The consulting firm also did a much broader study and — surprise, surprise — high tech firms are often having their enterprise lunch handed to them … by themselves.

Accenture’s study was of multiple industries, but at my request they broke out results for high tech specifically — and with answers from 180 enterprise communications and high tech customers with an average annual revenue of $1.4 billion and about 200 vendors, there was enough data to make the results reasonably valid. The results were something that should greatly worry many high tech vendor executives.

When asked the most important factors in doing business with a high tech vendor, the two most common answers by far were performance and quality of the product or service. (Interestingly, although the survey was conducted last year, only about ten percent of the customers said that price was the most important factor.) But this only applies to doing business for the first time.

For repeat business, however, the single most important factor to over half of the people who purchased high tech goods and services for these large enterprise customers was the quality of customer service. The problem is that what they expect in service generally isn’t happening, and the vendors don’t realize that there’s a problem.

That might seem like taking the negative view, but the problem is that one of the keys to profitable business is making repeat sales so that the company can amortize acquisition costs over a longer period of time and greater number of purchases, driving up the margin on all of the transactions. Unfortunately, this big gap between how clients and vendors perceive the level of customer service can — and has and is and will — lead to companies losing high revenue accounts.

About 65 percent of the customers said that “a superior experience makes me much more likely to remain loyal to that vendor.” But on a scale of 1 through 7, with 1 being “extremely low” and 7 “extremely high”, the customers rated their current satisfaction as a 7 or 6 only 40 percent of the time, although over 70 percent said that a vendor could create a customer support experience that would “lock in” their loyalty. Indeed, about 65 percent of the customers indicated a willingness to pay some degree of premium for high quality service.

But vendors think that they are already there. “In general, about 70 percent of providers think that they provide top of the heap service – they rate themselves as a level 6 or level 7,” says Brian Sprague, the senior executive in customer service and support group within communications and high tech at Accenture. There is a gulf between the customer and vendor perceptions.

That is translating into lost business. Over 31 percent of the customers said that they had switched vendors in the past because of poor service, and, according to Sprague, 30 percent are considering switching vendors today for the same reason. Given that the average worth of the business was $15 million annually, this is a financially big deal, particularly if you consider that the value is for a single account. If the numbers hold true, there may be many tech companies where a third of their big clients are planning to walk at any time.

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