Three Sectors That Need to Up Their Customer Service Game

Earlier this year, the Financial Times asked the question: “How did customer service get so bad?” It’s probably a question we’ve all been thinking, but it’s not until you see the data that you realise the scale of UK customer dissatisfaction.  

Importantly, it isn’t a sector-specific issue - almost all sectors have seen a decline in UK consumer satisfaction according to the Insitute of Customer Service (ICS). By the same measure, some are, of course, performing better than others, with some of the worst offenders being found in industries where there is a monopoly- if you’re stuck with a poor supplier, you often don’t have many options. 

What we’ve learned is that the problem and subsequent solution to poor customer service increasingly depends on the sector in question.

In this article, I will look at three industries - Education, Retail and Insurance - to help understand how we can start remedying fraying consumer relationships, with technology at the core. 

Education: Evolving to meet a new generation

Customer service in education is mainly directed towards ensuring the student has a positive academic experience. Educational institutions, especially in higher education, are much like any other business in which they are providing this service to keep their customers satisfied and loyal. 

Many factors influence a student’s decision about where to continue their studies. Since the pandemic, education has moved on from lecture halls and is no longer localised.

This increased flexibility and accessibility has limited the importance of location in the decision-making process and increased the necessity of strong communication tools. 

Delivering effective digital customer service in higher education to this generation specifically presents unique challenges. The average attention span for Gen Z is 8 seconds due to the mass amount of content consumed across multiple devices and channels daily. This will consequently bleed into the attention they give to other areas of their lives. 

This is why the education sector must see a significant shift towards using innovative technology, especially AI-powered solutions, to support and streamline these interactions. The questions asked do not vary widely; for instance, the majority will revolve around accommodation, courses, admission requirements, and the application process. Correctly implementing an AI-powered chatbot with the relevant knowledge will mean responses to repetitive queries can be solved immediately, regardless of what time it is, adhering to this generation's time preferences. 

Insurance: Taking advantage of the disruption

In the most recent ICS report, insurance as a sector saw a considerable fall in customer satisfaction by 2.1 UKCSI points between January 2023 and 2024. As an industry that depends heavily on building strong customer relations to navigate intricate inquiries and claims, this is a cause for concern. 

Navigating insurance-related issues can feel daunting. Customers may feel that despite the plethora of choices available, they still lack sufficient information to make an informed decision. There are also high risks associated with choosing the wrong insurance provider, the potential of being taken advantage of, and losing a lot of money in the process. In instances such as this, customers will prefer a higher level of service, even if it costs more. 

Although the move towards digitalisation is occurring, the industry is not excelling due to it but instead being disrupted by it.

Technological advancements are reshaping traditional business models and changing customer expectations putting insurance companies under pressure to perform. Over one-third of claimants stated that despite receiving a digital update, they needed to follow up on a call with their insurer as they felt dissatisfied and had further questions. 

Its companies that provide their customers with a personalised experience catering to their specific needs and preferences that will retain a loyal consumer base. Tailoring the insurance products you offer, customising prices, and targeting the correct marketing will make them feel appreciated and understood. Leveraging technologies with advanced analytical tools will enable the sector to gain valuable insights into customer behaviours. Moreover, investing in robust customer service channels, both digital and traditional, will facilitate smoother interactions and address customer concerns promptly.

Retail: Building an online presence

Since 2020, London’s famous shopping destination, Oxford Street has grappled with a vacancy rate of 16%, as 42 out of the 269 stores stood empty. While the pandemic undoubtedly played a significant role, it consequently surged the popularity of online shopping and e-commerce in the retail industry.

Retailers adapted quickly and created a competitive online presence to limit sales disruption. However, the real struggle arose when customers increasingly expected the same level of customer service online as they would in-store. Solving this issue is complex due to the limited availability of human interaction and the increased investment needed in a technological solution.  

Retailers receive mass sums of online customer inquiries and complaints across multiple channels, such as email, social media, or the website. Proactively replying to all can require manpower and resources, often straining the capacity of traditional customer service teams. Additionally, each reply requires the same, consistent tone to uphold the brand image. This is where a seamless omnichannel customer support solution will easily complete this task. Conversational AI, equipped with natural language processing, and machine learning (ML) algorithms, can be implemented into an organisation's emailing system. By comprehending user intent and responding autonomously, it can streamline customer interactions and enhance efficiency, all while delivering personalised service at scale.

Each sector is unique 

At a glance, it is clear that these industries highly prioritise customer experience, a trend observed across various sectors, but have yet to take advantage of the technical tools available. The rationale is very simple, exceptional customer service experience fosters loyalty, resulting in increased sales and revenue. Companies that excel in customer experience consistently outperform their competitors, with 73% achieving above-average financial performance. Hence, investing in digital innovation that boosts customer experience proves to be not only worthwhile but essential for sustained success.