Interview: 100 million hours on hold proves customer service is broken

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Jennifer Duke: Welcome to the Fear & Greed business interview. I’m Jennifer Duke.

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Jennifer Duke: According to a recent study, last year, Australians spent an

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Jennifer Duke: extraordinary 100 million hours on hold waiting for customer service.

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Jennifer Duke: It’s a pretty stark indictment of the state of customer

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Jennifer Duke: service right now, and there are plenty of stories to

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Jennifer Duke: support the figures. Take Qantas, for example. Before its most

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Jennifer Duke: recent problems, 2022 was defined by long waits on hold

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Jennifer Duke: at its call centre, dealing with endless challenges relating to

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Jennifer Duke: flight cancellations, lost baggage, and things like that. A new

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Jennifer Duke: association has now been formed to reverse Australia’s record of

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Jennifer Duke: poor customer service. And it’s secured the backing of large

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Jennifer Duke: Australian companies, including SEEK and Red Energy. Justin Tippett is

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Jennifer Duke: the founder and CEO of the Australian Customer Experience Professionals Association. Justin,

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Jennifer Duke: welcome to Fear & Greed.

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Justin Tippett: Yeah, hi, Jen. Thanks for having me on.

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Jennifer Duke: So I mentioned Qantas in the introduction, and it’s just

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Jennifer Duke: one example, but a prominent one. Did the airline fail

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Jennifer Duke: at customer service?

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Justin Tippett: I think it’s fair to say there’s a lot of

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Justin Tippett: organisations that are failing at customer service at the moment.

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Justin Tippett: Qantas is one of them, but I think we’ve all

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Justin Tippett: got some horror stories in our own personal lives.

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Jennifer Duke: What’s been your worst customer service experience? I’ve got to know.

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Justin Tippett: Oh geez, how long have we got, Jen? And that’s the thing, obviously, I run

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Justin Tippett: the association, but I’m a customer as well. So you

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Justin Tippett: just get exposed to these things all the time. But

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Justin Tippett: I reached out to a health provider, let’s just say

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Justin Tippett: last week, and I couldn’t get through on their call centre.

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Justin Tippett: So I reverted to live chat, a very common thing

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Justin Tippett: to do. And I finally got through to someone at

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Justin Tippett: live chat. They said I was in the queue, ” But

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Justin Tippett: don’t worry, we’ll notify you when you get to the

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Justin Tippett: top of the queue.” And I thought, ” Oh, that’s great.”

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Justin Tippett: I’m not joking, three days later, Jen, I got the notification.

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Justin Tippett: Three days.

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Jennifer Duke: That’s a heck of a queue.

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Justin Tippett: I know, right? So yeah, that’s just an indictment on how things are going at

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Justin Tippett: the moment.

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Jennifer Duke: So why exactly has customer service become so bad in

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Jennifer Duke: recent years? And have we been on some steady decline

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Jennifer Duke: towards this point? Or has something been a big trigger?

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Justin Tippett: Oh, look, it feels that way, doesn’t it? Look, I

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Justin Tippett: think COVID certainly shifted the dial on a lot of things

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Justin Tippett: for customer service. But if you look at call centers

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Justin Tippett: as an example, a lot of companies are offshore. They’ve

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Justin Tippett: put all their call centers in the Philippines, or Fiji

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Justin Tippett: even now, South Africa, et cetera. And, all of a

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Justin Tippett: sudden, those places couldn’t operate. And they didn’t have a

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Justin Tippett: presence left in Australia. So you saw companies like Telstra

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Justin Tippett: just suddenly scrambling going, ” Oh my God, we can’t get

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Justin Tippett: calls answered.” So that certainly was a pretty rapid decline.

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Justin Tippett: But customer service is more than just call centers, obviously. When

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Justin Tippett: I go into a retail store, or a cafe, or

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Justin Tippett: something like that, that’s customer service. And I think everyone you

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Justin Tippett: speak to will say, ” It feels like it’s just got

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Justin Tippett: a lot worse.” And I think some of that maybe

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Justin Tippett: is just due to the talent shortage that all industries

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Justin Tippett: are suffering. It’s very hard to get fine staff. And

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Justin Tippett: so you tend to scrape the barrel a little bit,

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Justin Tippett: don’t you? And you say, “I just need staff. I’ll take anyone.” Rather than

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Justin Tippett: having some thresholds that maybe would’ve been in place prior.

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Justin Tippett: So yeah, there’s certainly a number of factors that go

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Justin Tippett: into it.

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Jennifer Duke: And, obviously, there’s some pretty big negative impacts on customers

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Jennifer Duke: when they get that poor experience. But what impact does

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Jennifer Duke: it actually have on a business, and its bottom line,

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Jennifer Duke: and those other aspects?

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Justin Tippett: Well, I think the biggest impact, obviously, is you lose business.

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Justin Tippett: The stats that come out now. 92% of customers will

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Justin Tippett: completely abandon a business after two to three negative interactions. So, look,

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Justin Tippett: we’re pretty patient. Most people are forgiving. Every now and then,

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Justin Tippett: companies get things wrong. But what’s starting to change now,

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Justin Tippett: particularly with the younger generation, is 52% of customers will

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Justin Tippett: now switch after one poor interaction. So that’s a big

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Justin Tippett: impact on a business. And what’s even scarier behind that, Jen,

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Justin Tippett: is that only 4% of people actually complain. Most of

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Justin Tippett: us are just silent complainers. We won’t even say anything

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Justin Tippett: to the company, we’re just gone. You won’t see us again.

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Justin Tippett: So when I heard Tom Elliott talking on 3AW couple

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Justin Tippett: of weeks ago, he’d just been to his local cafe.

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Justin Tippett: And he was saying he just got ignored. He was there,

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Justin Tippett: no one made eye contact with him. He goes there

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Justin Tippett: all the time. Every day, he would go there to get a coffee.

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Justin Tippett: And you’d think you’d be a bit smart knowing that

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Justin Tippett: this guy’s probably got a bit more reach than most people.

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Justin Tippett: But after three times he was ignored, he just said,

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Justin Tippett: “You know what? Bugger it, I’m never going back again.”

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Justin Tippett: And then absolutely sledged them on radio as well. So yeah,

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Justin Tippett: there’s a pretty negative impact for most businesses when we

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Justin Tippett: get it wrong.

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Jennifer Duke: So what does good customer service look like? That’s the

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Jennifer Duke: big question.

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Justin Tippett: Oh, geez. Yeah, look, I think a lot of it

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Justin Tippett: depends on the channel that you go through. If it’s

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Justin Tippett: in person, obviously, you just want to be acknowledged. How

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Justin Tippett: many times have you walked into a store, like Myer, for

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Justin Tippett: example, and you go in there and you’re looking around,

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Justin Tippett: and it’s just crickets. There’s just no one there. I just want

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Justin Tippett: to be acknowledged. Or worse, there’s people there and they’re

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Justin Tippett: just not even paying any attention to you. They’re too

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Justin Tippett: busy talking to their colleague, or they’re on their phone

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Justin Tippett: or the computer. And you’re just like, ” Hello.” So that’s obviously

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Justin Tippett: a bit of a shocker.
And when you come to

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Justin Tippett: call centers, clearly, wait times is frustrating for people. Or

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Justin Tippett: how many times do you ring a call center and you say, ”

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Justin Tippett: Oh, hi, my name’s Justin. I’m just ringing about my

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Justin Tippett: energy bill,” or something. And they say, ” Oh, no worries,

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Justin Tippett: I’m happy to help you. Can I start with your

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Justin Tippett: name, please?” And you’re like, ” Oh my god,” when they’re

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Justin Tippett: just not listening. So that’s also frustrating. And then, of

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Justin Tippett: course, you’ve got things like live chat, that example that

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Justin Tippett: I just gave, where there’s just long delays. Or emails

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Justin Tippett: that take days to get responses on, et cetera. So

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Justin Tippett: I think there’s a lot of examples, depending on which

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Justin Tippett: part of customer service we’re talking about.

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Jennifer Duke: Stay with me, Justin, we’ll be back in a minute.

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Jennifer Duke: I’m talking to Justin Tippett, the founder and CEO of

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Jennifer Duke: the Australian Customer Experience Professionals Association. So what about a

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Jennifer Duke: company that’s getting it right? Do you have a good

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Jennifer Duke: example of that?

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Justin Tippett: Geez, it’s sad when you really have to wrack your

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Justin Tippett: brain trying to think of one. Because I think one of the challenges you’ve got

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Justin Tippett: is consistency. As a customer, that’s what I want. So

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Justin Tippett: Apple often comes to mind. And you go, ” You know

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Justin Tippett: what? When I go into an Apple store, the experience

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Justin Tippett: is normally pretty good.” But if you have something wrong,

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Justin Tippett: trying to book something into one of their tech support

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Justin Tippett: people, or trying to have a discussion on the call

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Justin Tippett: center, can be frustrating. So they don’t always get it

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Justin Tippett: right.
But I think one that’s globally most people probably

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Justin Tippett: understand would be Uber. And just how it really transformed

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Justin Tippett: the industry. And, obviously, taxis might have a different view.

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Justin Tippett: But it’s certainly made life a lot easier, doesn’t it?

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Justin Tippett: And customer experience is often the basics is just making

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Justin Tippett: it easy for customers. Let me do what I want to do.

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Justin Tippett: So I think they probably do get it right. It’s

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Justin Tippett: a pretty seamless process. You go to your app, you

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Justin Tippett: order it. You don’t need to pay your credit card

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Justin Tippett: when you get out of the car and all that

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Justin Tippett: sort of stuff. It’s all just done for you.

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Jennifer Duke: So you’re mentioning, obviously, automation, digitisation, and apps, and things there.

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Jennifer Duke: So what role does tech play in good customer service?

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Jennifer Duke: And are we getting a little too dependent maybe on

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Jennifer Duke: tech to provide it when there’s human interaction that might

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Jennifer Duke: still be required in some instances?

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Justin Tippett: Oh, it’s a really good question. Oh, look, I think clearly tech is

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Justin Tippett: having a big impact on a lot of industries. And

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Justin Tippett: AI has obviously just had an explosion in the last

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Justin Tippett: six months or so. I can’t go a day without

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Justin Tippett: someone telling me about a new ChatGPT feature, or the

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Justin Tippett: new AI that’s going to transform your world. And, look,

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Justin Tippett: it is certainly having an impact. But I think for customers,

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Justin Tippett: the key thing is reduced effort. You just got to

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Justin Tippett: make it easy for me to do what I want.

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Justin Tippett: So if technology helps me to do that, great. An

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Justin Tippett: example of that is most of us don’t want to

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Justin Tippett: ring a call center if we’ve got an issue. We’ll

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Justin Tippett: try and self- serve first. So we might go to

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Justin Tippett: a website, look at the FAQ sections. We might go

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Justin Tippett: to YouTube to watch a how to video, or TikTok

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Justin Tippett: if you’re a bit younger. And so, yeah, technology from

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Justin Tippett: that perspective is going to make life a little bit

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Justin Tippett: easier for us. And the other opportunity is just being

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Justin Tippett: more personalised with interactions. We get so much data now

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Justin Tippett: on customers that do business with us. And so it’s

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Justin Tippett: about using that data smarter to make it a more

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Justin Tippett: personalised experience for me. Because, again, research shows that about 80%

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Justin Tippett: of consumers are more likely to buy from brands when

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Justin Tippett: it is a personalized experience. We just want to be

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Justin Tippett: treated like individuals and be recognised. So when you get

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Justin Tippett: that right, it’s good for business.

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Jennifer Duke: I really like that because, often, we’re talking about how

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Jennifer Duke: collecting data for people is a bad thing. But, actually,

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Jennifer Duke: there’s an opportunity there to make it a real positive,

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Jennifer Duke: and an actual reason to hand over your information to

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Jennifer Duke: a company.

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Justin Tippett: Yeah, that’s right. There is a little bit of that.

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Justin Tippett: It’s a trade off, isn’t it? Yeah, you don’t want everyone

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Justin Tippett: knowing too much about you. But yeah, when it’s used well,

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Justin Tippett: it genuinely can lead to a much better experience. If

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Justin Tippett: we know your buying patterns, we could proactively reach out

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Justin Tippett: and suggest something that might be useful for you. Little

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Justin Tippett: basic things like it’s your birthday. But even just those

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Justin Tippett: little simple things like appointment reminders. If you’ve made an

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Justin Tippett: appointment at the doctor’s or the dentist or something like that,

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Justin Tippett: and you get that little text message saying, “Hey. Just

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Justin Tippett: a reminder your appointment’s tomorrow.” And you go, “Oh, good, that’s right. I forgot

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Justin Tippett: about that.” So yeah, there is certainly a role to play for technology.

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Justin Tippett: I think what you find though, in call centers in particular,

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Justin Tippett: what we’ve found is a real transition in the skillset

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Justin Tippett: required to be a call center agent. When I started

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Justin Tippett: on the phones when I was 18, so it was a hell of a

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Justin Tippett: long time ago, and back then, they were really basic calls.

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Justin Tippett: Like banks, for example. We literally would get calls from

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Justin Tippett: customers saying, “Hi, I just want to check my balance.”

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Justin Tippett: Because we didn’t have apps back then. We didn’t even

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Justin Tippett: have a computer back then. So they were really easy transactional

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Justin Tippett: type inquiries to have. But now what’s coming into the

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Justin Tippett: call centers is really complex stuff. Because I’ve already gone

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Justin Tippett: to my app and it didn’t work. So, suddenly, I’m

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Justin Tippett: tech support, when I was really just a call centre agent.

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Justin Tippett: So it’s really changing the industry, if you like, in

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Justin Tippett: terms of call centres in the skillset that’s required of

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Justin Tippett: the agents to deliver good customer experiences as well.

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Jennifer Duke: So I’m really curious about your thoughts on what the

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Jennifer Duke: big solution is for fixing this, I’m going to call

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Jennifer Duke: it a customer service deficit in Australia, because economics is

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Jennifer Duke: my background. But do you think that leaders need to

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Jennifer Duke: change the way that they view customer services at businesses

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Jennifer Duke: from something that’s nice to have to something that’s vital for their business bottom line, their

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Jennifer Duke: business success?

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Justin Tippett: Yeah, look, hopefully, some of the stats that I’ve already

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Justin Tippett: reeled off resonate with people. Because I think the reality

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Justin Tippett: is, to get a seat at the exec table, you’ve

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Justin Tippett: got to demonstrate the tangible impact that CX is going

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Justin Tippett: to have on the balance sheet. And I think, as

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Justin Tippett: practitioners, we’ve probably been pretty bad at that. We talk

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Justin Tippett: about, as you said, it’s a nice thing to do.

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Justin Tippett: CX is all very fluffy and let’s be nice at

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Justin Tippett: customer service, et cetera. But the reality is there’s hard

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Justin Tippett: numbers behind it.
And if you’ve heard of that Net

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Justin Tippett: Promoter Score, which a lot of companies use. And that’s

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Justin Tippett: typically just asked on a scale of one to 10,

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Justin Tippett: how likely are you to recommend company A to your

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Justin Tippett: family or friends? The research has shown that people that

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Justin Tippett: are classified as promoters, so they’re the ones that gave

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Justin Tippett: it a nine or a 10, have a customer lifetime value

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Justin Tippett: of a minimum of 600% higher than a detractor score,

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Justin Tippett: which is the ones that gave it a bad score.

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Justin Tippett: So it’s a big number. And literally every single stat

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Justin Tippett: that we see suggests that there is more revenue to

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Justin Tippett: be made when you get CX right. So I think

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Justin Tippett: we’ve really got to get that message out to the

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Justin Tippett: leaders of industry. And say, ” It’s not just a nice

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Justin Tippett: thing to do, it is actually good for your business.”

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Justin Tippett: And I think if we can get that message out there clearly,

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Justin Tippett: I think it’s going to be a good thing for

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Justin Tippett: everyone that works in our industry.

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Jennifer Duke: I think there’ll be plenty of business leaders who are

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Jennifer Duke: listening to that loud and clear, Justin. Thank you so

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Jennifer Duke: much for talking to Fear & Greed.

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Justin Tippett: No, my pleasure. Thanks for having me.

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Jennifer Duke: And that was Justin Tippett, the founder and CEO of

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Jennifer Duke: the Australian Customer Experience Professionals Association. This is the Fear &

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Jennifer Duke: Greed business interview. Join us every morning for the full

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Jennifer Duke: episode of Fear & Greed, Australia’s best business podcast. I’m Jennifer

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Jennifer Duke: Duke, economics correspondent for Capital Brief, and filling in for

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Jennifer Duke: Sean Alymer. Have a great day.