New Plymouth couple Dianne and Grant Dobson learnt the perils of basing their business on Facebook Marketplace last month when their account was shut down without notice or explanation. “Arrange With Style” specialises in decluttering and downsizing, selling unwanted items on behalf of others and taking a commission for its efforts. Although the Dobsons have a website, most of their trades happen on Marketplace, Facebook’s free listings site, which is accessible via app and website. Repeated appeals to have the page reactivated were met with automated messages. The account was restored nearly three weeks later but only after an RNZ story on the couple’s plight went viral.
When my own Facebook account was hacked in March, I was in a similar position until contacts at Facebook owner Meta’s local public relations agency pulled some strings on my behalf.
Any goodwill we once showed towards the companies in our lives – the retailers, utilities, and financial service providers who scrambled to shift their services online during the pandemic – seems to have evaporated in the past year. Chronic staff shortages and lingering supply-chain issues have played havoc with many business operations.
The “please respect our staff” signs behind the counter in retailers and restaurants advertise the simmering tensions. We’ve faced escalating prices for essentials such as fuel and groceries, turning sentiment against companies that seem to be profiting handsomely from our misery.
Surveys around the world reveal languishing levels of customer satisfaction. One of the biggest annual surveys, the 2023 Forrester customer experience index, which polls 96,000 US consumers on 221 brands, has seen scores slump for a second consecutive year. Only luxury car brands showed any meaningful improvement.
Forrester puts the malaise down to the “talent-constrained recession” and customer expectations increasing, “regardless of macroeconomic conditions”. It’s the same picture here.
Most sectors in New Zealand saw their average scores drop in Kantar’s 2022 customer leadership index. Top spot was claimed by online share trading app Sharesies, followed by AA insurance and Mitsubishi Motors.
Air New Zealand has had more than its share of customer-service headaches in recent years, after having most of its fleet grounded during the pandemic. This showed in the Kantar index: the airline slipped to 20th place in 2022, having come in fourth a year earlier.
But the airline also topped Kantar’s corporate reputation index this year for the ninth consecutive year, suggesting much-loved brands can weather a storm of customer outrage – at least for a while.
The fuse is shorter
Ponder this the next time your blood pressure rises as you sit on hold waiting for the bank to answer your call – is its customer service going downhill, or are you just getting grumpier?
“It’s not that these industries don’t care or are consistently terrible,” says Jonathan Pickup, Kantar’s group client director. “Customer expectations change over time and some brands don’t keep up with that.”
Low levels of satisfaction have also been picked up in Consumer NZ’s customer satisfaction surveys, says the non-profit organisation’s head of research and advocacy, Gemma Rasmussen.
“The fuse is a lot shorter,” she says. “I think that ties into cost of living concerns: you might actually be getting the same level of service, but you’re grumpier because of all the pressures that are happening in your life.”
But sub-par service and a lack of perceived value are real issues. Price competitiveness is the No 1 factor weighing on customer satisfaction, and consumers have been squeezed across the board.
The July appointment of Pierre van Heerden as the Commerce Commission’s grocery commissioner followed a ComCom study that estimated our grocery duopoly was generating $1 million in excess profits every day.
Instructed by the government, the commission has also begun a market study into competition in personal banking services, which will report back by August 2024.
Who you gonna call?
Perception matters, says Rasmussen. When banks report billions in profit while shutting down branches and ATMs, it breeds resentment.
“If you buy a computer from Apple, you choose to purchase that product and you have a preference for that brand,” she says. “Where you bank, where you get your energy, where you buy your food from, those are essential things you have less choice with, particularly in a country like New Zealand, where there’s just not a [large] competitive market.”
In many of Consumer’s customer satisfaction and people’s choice awards, it’s the small brands that come out on top – the challengers who are hungry for customers. Powershop and Frank Energy shared the people’s choice award in its latest power company rankings. Big gentailers Contact Energy and Meridian Energy trailed the pack.
On concrete customer service measures such as call-centre response times, Consumer’s 2022 testing found widely varying pick-up times. Meal-kit company Hello Fresh answered in 15 seconds, whereas 2degrees had the worst wait time of 54 minutes, 50 seconds. The average wait time is a mildly irritating 12 minutes. Streaming video services Netflix and Disney+, currently locked in a battle for subscribers, pick up the phone quickly for customers. But the likes of Meta don’t even have a New Zealand number.
“At the end of the day, people would love to speak to a person, because there’s nothing worse than pinging around a system and getting generic responses,” says Rasmussen. “I would imagine that potentially things are going to get a lot worse before they get better.”
Migrating off
Fixing bad customer service is no small task, particularly for large businesses where ageing technology and processes exacerbate the problem. Jason Paris became Vodafone’s chief executive in November 2018, after a six-year stint in senior positions at arch-rival Spark. His first task? Addressing Vodafone’s woeful track record on customer satisfaction.
The company, which rebranded as One NZ earlier this year, had grown its mobile and broadband customer base through acquiring the likes of TelstraSaturn and internet providers ihug and Farmside, merging products and billing systems in the process.
Errors in phone bills were common and contact centre staff had to navigate numerous customer-management systems just to answer basic product and account-related questions. “We had hundreds of thousands of New Zealanders we had pissed off for whatever reason who had said, ‘I’ve had enough and I won’t be coming back,’” says Paris. “At the core, it was about trying to get our backyard in order, making sure our network performance was excellent, that our products were easy to understand, that they worked first time.”
He created the X-Squad, a crack team of customer-service agents to handle customers’ problems. Soon after, Vodafone was bought by investment firms Infratil and Brookfield Asset Management for $3.4 billion from the international Vodafone Group. The new owners were willing to invest to improve the company’s competitiveness. That led to a major upgrade of its technology systems that is still under way.
“All consumers and small and medium enterprises have been migrated onto a single stack,” Paris says. “Enterprise customers are being migrated now. It’s quite a complex programme to migrate customers, but I’d say we’re probably 75% there.”
Paris made the decision to bring most of One NZ’s consumer and business call centres back home from India – a “skeleton crew” of agents are still based in the Philippines where their American-influenced English is easier for Kiwi customers to understand. But soon all contact centre agents will operate in New Zealand. The X-Squad, now called Arohia, has tripled in size.
Last year, the company bought out its joint venture partner Millennium Corp, taking full ownership of 52 retail stores and giving it more control over its customer experience.
Right first time
The pandemic put pressure on telcos that had to accommodate millions of people suddenly working from home and relying on broadband connections to do so. Did the lockdown experience make customers grumpier?
“Covid didn’t lead to more impatience,” Paris says. “I think people are just more angry in general. I’m a bit worried about that, to be fair.”
But the majority of customers, he adds, are “loyal, patient, reasonable, and forgiving”.
“People just want great connectivity at a fair price, and they want it to work. And that’s it.”
By One’s own measures, customer service appears to have improved dramatically. Its contact centres receive 25% fewer calls than they did two years ago, says Paris. The “first-time fix rate”, which indicates the percentage of time an issue is resolved on the first contact, is now 82%.
“That used to be closer to 50% when I started,” says Paris. “It still means that 18% of customers are going into that sort of telco death spiral, lost in the maze of complexity and having to call back.”
Independent surveys paint a less optimistic picture. In September, One ranked bottom in the Commerce Commission’s dashboard of customer service indicators for mobile services. Just 8% of residential customers said they would recommend One’s mobile service to others. In residential broadband, it came second to last in three out of four categories.
The commission introduced the rankings after a spike in complaints about the telecommunications industry in general and is considering forcing telcos to publish their dashboard rankings on their websites.
Low-cost mobile and broadband operator Skinny, a unit of Spark, topped the mobile rankings and two of the residential broadband customer service measures. Again, the hungry challenger has won favour.
In a recent “Ask me anything” session with Stuff readers, Paris addressed the disconnect between One’s own measures, which are tracking in the right direction, and the commission’s independent surveys.
“The ComCom and I agree that we need to improve service levels further, but I don’t agree that we are the worst in market,” he told one reader with the handle “Pandemik”. “These results don’t correlate with the ComCom results, so we need to work out why that is, but regardless, we are working hard across the board to improve even further.”
Paris told the Listener he wouldn’t have gone ahead with the rebrand from Vodafone to One if he hadn’t had faith that the company was well on the way to solving its customer service woes. “If you do it and you ask customers to give you a second chance, you’d better make sure you nail it. We were really confident we had made a dramatic improvement in network and service quality.”
He will no doubt be closely scanning the emails flooding in the next time he sends out his quarterly chief executive’s letter, which hundreds of thousands of One customers receive. He invites feedback direct to his inbox and receives no less than 1500 emails. “I block out about two or three days, triage them into clusters and a team helps answer the queries.”
Putting faith in AI
Technology has long been touted as a key part of the solution to poor customer service. The rise of “omnichannel” support means picking up the phone should now be your last resort. Email, web forms, in-app messaging, social media and chatbots with cutesy names like Red, Oscar and Ava take pressure off overburdened call centres. If you’ve been put off by stilted chatbot conversations, with generic responses that miss the nuances of your query or seem to know none of your account details, things are changing for the better.
The rise of conversational artificial intelligence, drawing on large language models trained with vast amounts of data harvested from the internet, are making for much more naturalistic conversations. If you’ve used ChatGPT, you can imagine how useful that type of chat could be when its capabilities tap a company’s database and your personal account information.
Auckland-based Ambit has built AI chatbots and automated service agents for the likes of Tower Insurance, Hallenstein Brothers and The Warehouse Group. Tim Warren, its co-founder and chief executive, says his team saw the potential of large language models nearly two years ago and started fine-tuning them to power chatbots for the buy now, pay later platform Laybuy.
With its financial service built into thousands of retailers’ websites, Laybuy approached the 2021 Christmas season with a problem – despite doubling the size of its customer-service team, it had 11,000 outstanding service tickets, most of them for mundane queries about refunds or returns. Within three weeks, Ambit developed Hugo, an AI chatbot trained to answer common queries from Laybuy customers. Hugo reduced the customer response time by 75 hours.
“You think 15 minutes is tough, imagine waiting 75 hours,” says Warren. “They got an increase in customer satisfaction of 30%.”
Hugo now handles 70% of Laybuy’s customer queries. The chat conversation is just one aspect of an AI-powered customer experience. Ambit can monitor all digital customer interactions with one client, lines company Vector, analysing the language in chats and messages to spot emerging problems.
“If there’s a power outage, someone’s hit a pole or a transformer, we will see a spike in customer queries saying, ‘When’s my power coming back on?’” Warren says. “Sometimes, we see it before Vector will even know, because we’ve got the customers right there.”
At One NZ, Paris is doing the same, using AI to detect network performance anomalies. It can also scan call centre transcripts in real time to identify trending issues. Paris says the AI behind One’s chatbot, Hana, is still a work in progress.
Air New Zealand’s Oscar chatbot will let you research flight options, dispense travel alerts and let you know your baggage allowance. “Ultimately,” says head of customer services Alisha Armstrong, “we want the app to play a key role in our service experience for the future. Oscar should be the face of the first point of contact for a customer.”
Even if you hate the idea of conversing with a computer about your flight booking or credit card bill, you should still celebrate the rise of the chatbots, says Ambit’s Warren. “My parents are probably not going to ever use my technology, and I’m fine with that. But if people my age and my kids’ age do, then it means my parents are going to get through on the phone quicker.”
Customer service staff are harder to recruit, and increasingly expensive to employ, he points out. The only answer is automation of some kind.
“Customers don’t want ChatGPT. You know what, if they bought a pair of shoes, they want them to arrive, and if they’ve got the wrong size, they want to swap them.”
More than anything, he says, customers simply want a quick response, no lengthy delays listening to terrible hold music, or slow replies to email or web-form queries. “They prefer to spend 10 minutes solving a problem with an immediate pick up than 5 minutes waiting for a one-minute resolution.”
Hopefully, corporate New Zealand is listening.
