Type to search

Business Development eCommerce Learning Marketing Partner Content Topics

Aligning Channels with Evolving Consumer Expectations, Preferences & Behaviour

17 min read

The Customer Service Experience: Aligning Channels with Evolving Consumer Expectations, Preferences & Behaviour

About this Paper

Emerging digital technology is triggering an urgent reconsideration of how customer service is managed and delivered. Customer service remains centred around traditional contact methods, specifically phone, email and face-to-face interactions. Given the growing popularity of digital channels, it is important to manage the current and future requirements of the customer, providing customer service channels of choice. For many consumers, this means offering a careful balance of traditional and digital customer service channels.

This paper uses secondary research and primary data collected via the Customer Experience & Insight (CXI) Research Group’s X-Pulse survey (including customised questions developed by CPM Australia) to identify the current and fut

Subscribe to get access over full content Subscribe
ure state of customer service in Australia.

The customer service experience is explored through the lens of evolving customer service channels and consumer expectations, preferences and behaviour. Importantly, insights are gleaned from both academic and trade research and practice. Note: Information sources used to compile this paper are referenced throughout with active links, and a full reference list of sources provided at the end.

The Customer Service Experience

By definition, customer service consists of a collective set of policies that guide every way a company and its employees interact with customers. It encompasses every aspect of an interaction, from parking availability to greeting customers, handling service complaints and backing up a product or service. At its core, quality customer service is about making sure customers feel they are valued, treated fairly, and appreciated in recognition of their commitment to the brand. Good customer service is therefore key to a good customer experience, and often leads to greater customer satisfaction. Good customer service is also the defining characteristic of successful customer–brand relationships, and there is a strong positive relationship between customer service and business success. However, our research finds that more than two-thirds of Australians believe companies are not placing high importance on providing good customer service (Figure 1).

So, what constitutes a good versus a poor customer service experience? A poor customer service experience fails to deliver on consumer expectations for polite staff (35%), consistent information across both digital and human interactions (34%), and a first contact resolution (31%) (Figure 2).

On the flip side, consumers believe that a good customer service experience is mostly about getting the basics right (Figure 3). This means that despite an expansion in the number of ways that customers can interact with brands, consumers expect service that is friendly, personal and consistent, yet still fast.

In terms of delivering excellent customer service (see Figure 4), Australian consumers believe it’s about getting the right information, when they need it. This means accessing knowledgeable representatives (65% high–very high importance), accessing correct information (65%) and being able to get queries resolved quickly (64%). Looking to global research on customer service features and functionality, personalisation (27%) and proactive notifications (19%) are not nearly as important as simplicity and ease (50%).

The Current State of Customer Service

In 2015, a frustrated Comcast customer built an automated bot that monitored the speed of his Internet service. Whenever it fell below the agreed level, the bot would take to Twitter and tweet his frustration, as well as the current speed, to Comcast. Welcome to the current state of customer service – consumers are incredibly demanding about what they expect from companies, taking control of the service they receive. Evolving customer preferences and behaviours are tightly linked to innovations in digital technology. Brands must embrace and integrate digital and traditional customer service channels in order to keep pace with heightened consumer expectations.

Digital Transformation

The customer service landscape has evolved significantly, truly undergoing its own digital transformation. One central aspect to this transformation is the delivery of enhanced customer service by embedding digital tools, platforms and channels into strategy and processes. This means being able to service customers over a plethora of digital channels, from Twitter and Facebook Messenger to SMS, mobile apps and live chat. As such, delivering successful customer service today involves exploring digital opportunities. This enables brands to differentiate from competitors, better understand customers, automate processes, provide more self-service capabilities, and offer more personalised service.

Further, digital channels such as social media and live chat can drive customer experiences that deepen customer relationships, as well as advance new revenue-generating opportunities. However, research has found that 75% of CFOs think their business is missing out on revenue opportunities by not having the right infrastructure to support digital transformation, fearing their business will become uncompetitive. The challenge is adopting new technology with purpose to make the experience feel more human– empowering employees without creating frustrations for customers.

Social Media

The impact that social media is having on the customer service experience is undeniable, especially in making the process faster, easier and more shareable. The use of social media as a customer service channel has given rise to the terms ‘social service’ and ‘social care’ – the practice of providing customer support through channels such as Facebook and Twitter to quickly answer questions. Social service has been shown to have a positive effect on the bottom line, with customers spending 20% to 40% more with firms that engage and respond to customer service queries via social channels. Importantly, customers expect brands to respond as though they were one of their own followers; more than 50% of Twitter users expect a response in less than 2 hours. Consequently, companies who ignore customer support requests on social media see an average churn rate that is 15% higher than companies who do not. The use of social media monitoring for customer service delivery is expected to increase over 200% in the next 18 months.

Best Practice

Microsoft Xbox

Games and entertainment brand Xbox’s @XboxSupport is able to reply to social media posts within an average timeframe of 2 minutes and 42 seconds. They achieve this with a dedicated Twitter customer service team who respond to all @’s publicly. Monitoring tools are used to proactively find and contact users who are having conversations about their brand. The company also adds a personal and authentic touch to replies by adding the initials of the person who responded.


Chatbots are rapidly becoming a regular component of the customer service experience and are constantly evolving, including the integration of Artificial Intelligence (AI). Up to 80% of customer engagements can be handled by bots, if the bots are also integrated seamlessly with agent work flows.Consumers prefer chatbots for their instant serviceability, providing rapid answers 24/7.

Greater customer engagement can also be obtained with chatbots given their ability to start a conversation and engage in friendly interactions. For customers, chatbot benefits extend to the ability to provide proactive, rather than reactive, service. Already, major brands such as Nike, Apple and Target have phased out email in favour of chatbots and the provision of real-time communications.

Retailers are using chatbots as a customer service tool, becoming a personal shopping assistant for some. The global chatbot market is expected to reach US$1.25 billion by 2025, a compounded annual growth rate of 24%. By 2020, 80% of businesses are expected to have implemented some sort of chatbot automation.

Best Practice


Global cosmetics brand COVERGIRL has launched a bot (KalaniBot) in collaboration with influencer celebrity Kalani Hilliker that simulates the tone and style of conversations with the real-life Hilliker. COVERGIRL describes this as the first influencer marketing campaign involving chatbots and has seen strong positive sentiment about the initiative. KalaniBot analyses and then simulates the influencer’s conversational style across all her social media accounts and is reported to get smarter as it interacts with fans.

Messaging Apps

Unlike traditional live chat, embedded into a website, consumers can now chat with brands in messaging apps that are integrated across web, mobile and tablet devices, allowing them to transition back and forth seamlessly without losing the conversation’s history and context. In this way, messaging apps are more convenient for customers and more efficient for brands. Messenger customer chat is particularly valuable for customer service teams, enabling them for the first time to provide consumers with a single, seamless experience across devices. It’s been predicted that, in 2019, requests for customer support through consumer messaging apps will exceed requests for customer support through social media.

Best Practice

Marriott International

Hotel chain Marriott International’s chatbot works with Facebook, Slack and more. Customers can arrange to stay as guests at Marriott hotels and handle other hospitality-related arrangements, such as group conferences. The company claims a five-second response time and has gradually expanded the chatbot’s AI to offer more complex services via messenger. Guests can also communicate with the chatbot while they’re staying at a Marriott property instead of contacting guest services other ways.

Live Chat

Live chat is an increasingly popular customer service channel and highly useful given its functionality and ease of use within a website. Although live chat interactions can take longer than a voice call, staff can handle multiple queries simultaneously, and customers can multi-task as they wait for a response. Chat also provides a platform to steer questions to digital channels or offer enhanced service, sending a customer an illustration, a brochure or a link to an instructional video, for example.Live chat has a positive effect on customers, with research finding that it contributes to positive word-of-mouth, helps to attract new customers, and supports business growth. However, customer satisfaction with live chat can decrease after 30 seconds of waiting and 38% of consumers report poor user experience as the channel’s biggest flaw Live chat is expected to grow by as much as 87% in the next 12 to 18 months.

Best Practice

Procter & Gamble

Procter & Gamble has created voice activations for laundry detergent brand Tide, including an Alexa Skill that gives users easy step-by-step instructions on how to best manage their laundry routine. For example, this skill helps to remove more than 200 kinds of tough stains, understand how to use your machine, and care for hardto-wash fabrics, and provides image and video content on devices with screens.

Consumer Expectations

Multiple Channels

Consumers, like brands, use a variety of channels in their everyday lives: social media to share experiences, instant messaging for quick updates, phone calls for in-depth conversations. Importantly, consumers are taking those channel expectations with them into their customer service interactions – demanding timely, reliable and effortless customer service across a wide range of channels.

When companies engage with and respond to customer service requests via social media, those customers spend 20% to 40% more money with the company.

Effortless Service

Customer service is not just about quick response times, a friendly tone of voice and knowledgeable advice – customers also expect effortless service. Delivering effortless customer service is critical to delivering a seamless customer service experience. To consumers, this means customer service that is convenient, able to offer in-channel resolution, and supported by agent expertise Increasingly, digital customers also want their voices heard and problems resolved, quickly and without having to jump through inefficient or ineffective service hoops. If customer effort in service enquiry and delivery is disproportionate, eroded brand value and customer satisfaction and loyalty can result. In recognition of this, leading companies are delivering low-effort customer service experiences by improving not only operations and processes, but also the skills and capabilities of frontline staff.

96% of customers who put forth high effort in service interactions are more disloyal, while only 9% of those with low-effort interactions are more disloyal.

Consumer Preferences

Blended Channels

Consumers prefer a blend of both digital and traditional channels in their customer service interactions. Speaking with a real person over the phone (versus dealing with an automated voice response or chatbot) is by far the channel of choice for both simple (43%) and complex (55%) enquiries, particularly for consumers aged 55–74 years (see Figure 5).2 Social media, text messaging and mobile apps are less popular customer service channels across all ages. Consumers aged 18–34 years have the strongest preference for digital channels: email (complex 32%, simple 42%), web chat (complex and simple 24%), text message (complex 17%, simple 12%), and mobile app (complex 14%, simple 20%). The second highestrated channel for simple enquiries is email (37%), while face-to-face interaction (45%) comes second for more complex enquiries. Looking to global research, speaking over the phone with a live customer service agent is again the most preferred (84%) customer service channel, followed by email (55%) and online chat (41%).Further, consumers prefer digital channels for independent and low-involvement tasks(i.e. checking account status, handling website and mobile app issues), whereas traditional channels are preferred for issues such as billing, refunds or returns, and product/ service support.

73% of consumers want a combination of digital and traditional customer service channels in resolving an issue.

Human Touch

While consumers are embracing digital channels and self-serving, they are still calling for human support. Thus, human engagement will always have a role to play in the customer service experience. More specifically, consumers want to communicate with a human service representative when solving a problem or query. In our research, two thirds of consumers think this is highly important, especially older consumers, and an automated voice response or chatbot remains unpopular for solving problems or queries, particularly among those aged 55–74 years (90%). Younger consumers (18–34 year olds) place somewhat less importance on this; however, they still consider access to human service representatives to be important as only 5% report it to be of no or low importance (Figure 6).2 Human touch is also a connector – creating real connections by making technology feel more human and giving employees what they need to create better customer experiences

74% of consumers would be more loyal to a business that gives them the option to speak to a human.

Consumer Behaviour

Channel Engagement

Consumers are engaging with a number of channels in seeking customer service. The most used customer service channel is speaking over the phone with a live customer service agent (81%), followed by email (43%) and online chat (30%). Other research shows that digital contact channels (eg.online accounts, social media, web chat, web self-service and mobile apps) are most commonly used by consumers to contact mobile providers, banks and online retailers, as well as for day-to-day service provider engagement (e.g. using mobile apps for making a payment or transferring money).


Sharing Experiences

Consumers are very active in sharing their customer service experiences, with word-of-mouth the most popular channel across all age groups (Figure 7). The majority of Australian consumers prefer to share their customer experiences in person and to 1–5 people (average 70%) (Figure 8). In terms of age, consumers 18–34 years are more active in sharing positive experiences (74%), while consumers aged 55–74 years more active in sharing negative experiences (82%). Importantly, customers are more likely to tell people about negative customer service experiences (75%) than positive experiences (66%).2

Poor Experience Impact

Critically, our research shows that the customer service experience has a significant impact on consumer buying behaviour in terms of purchase intentions. In fact, 30% of Australian consumers have stopped shopping at a company in the past year due to a poor customer service experience (especially those aged 18–34 years). Consumers aged 55–74 years are more tolerant of poor customer service, with only 21% ceasing to purchase from a company in the past year as a result (Figure 9). Common reasons for doing so are generally linked to how the company handles interactions with its customers, with the top reason being company representatives were not courteous or friendly


Customer Service Experience Gaps

A gap in the customer service experience exists when there is a disconnect between the service delivery quality a company intends to provide and the customer’s actual perception of the service delivered, which is based in part on their expectations. Today, many consumer expectations for customer service are not being met, with many customer service offers not aligning with consumer preferences. According to research conducted in the US and UK, just over half of customer care teams are meeting consumers’ digital channel expectations (54%), and only 7% are exceeding these expectations; this means that 39% are failing expectations. In terms of specific customer service channels, there is a gap between what customers want versus what organisations plan to implement in the future (see Figure 10).33 Importantly, while brands are looking to adopt cutting-edge digital platforms for customer service, automated services come at a price: meaningful human interaction. Thus, disparity exists between consumer demand for human service touchpoints and business pressure to embrace emerging digital platforms.

Our research identifies a disconnect between what consumers really want and what companies are doing to enhance the customer service experience. In relation to recent purchase experiences (either in-store or online), 49% of consumers report a mix of positive and negative experiences, with consumers aged between 18–34 years reporting the most negative experiences at 12%. Among the most satisfied consumers were those aged 55–74 years, recording the most positive experiences at 57% (Figure11).2 Consistent delivery of positive customer service experiences is paramount, so there is an opportunity to enhance the customer service experience into the future.

The Future State of Customer Service

The digital transformation of customer service is undeniable, particularly for consumers seeking quick resolution for low-involvement tasks and queries. For companies looking to transform in this way, digital represents an opportunity to provide a lower-cost and more rewarding customer service experience – one that enables customers to self-serve using the channel and time most convenient for them. However, it’s critically important that the human element remains a key component of customer service delivery. As such, the integration of digital and traditional customer service channels will become a key differentiator. The need for both digital and human elements is demanding companies to make the necessary investments now to be ready for the future by offering an even more seamless experience across all channels. The fundamental challenge is that companies continue to develop digital channels independently of their existing human-support channels. This is the future state of customer service.

Emerging Trends

Blending AI and HI

AI is expected to produce the same level of business and social disruption as the Internet, with 95% of customer interactions carried out by some form of AI by 2020. However, while AI is impacting digital customer service, the future will involve a delicate balance between AI and human intelligence (HI). Human interaction remains key, with many consumers (59%) preferring human interaction over being serviced by a bot or an AIdriven resolution. AI will likely lead to the automation of transactional, low value-dded tasks and therefore allow organisations to invest in the human aspect of customer care. This means that frontline staff will be better prepared and better trained, and will play an even more strategic role in customer service experiences. The human element of customer service will also remain critical in meeting customers’ emotional needs, for instance showing empathy when addressing service issues.

Beyond Service

Companies need to think about customer service not just in terms of communicating with and assisting customers and resolving their queries, but also on the basis of problemsolving and concierge-style services. Ultimately, the future of customer service involves moving from a transactional mindset to one that is focused on ongoing interactions with consumers, and indeed fostering and maintaining customer relationships. With a range of available datagathering sources (such as smart sensors, face and object recognition technologies, and wearable devices), it is possible to gather and analyse a host of information about customers (including their location, preferences, purchasing history, and much more) in real-time, as never before. This provides a valuable opportunity for companies to be more pre-emptive in delivering customer service and identifying surprise and delight opportunities.

Concierge Services

Technology is enabling consumers to outsource their own complaints and service needs to a professional third party, which will likely increase the volume of service requests received by brands (at least in the short term). Customer service concierge services, including AirHelp and Service, allow customers to log their complaint about a specific company and have a concierge take care of the entire process. These services are also designed to learn and become proactive, uncovering ways in which customers may have been wronged. Further, such services will look for things like missed flights, lost baggage and other issues for which customers may be entitled refunds. AirHelp for example, can scan an entire email inbox to find all flight-related emails, run an automated analysis to determine if any of those flights were delayed, and automatically execute refund demands with each airline.


Consumers increasingly prefer the ability to solve their own issues. In fact, 81% of customers across all industries attempt to resolve their issue themselves before contacting a live customer support person. Consumers save time when they can easily find a resolution to their problem without having to initiate a customer service request. In line with consumer preferences for self-service, more companies will adopt and implement technology that enables it. Having a robust knowledge base on a website is an effective way to provide self-service support. Developing how-to guides and videos, and making them accessible to customers through a website, is also valuable in this regard. Providing a way for customers to solve their own problems not only saves time for the customer; it also means less support cases for the company to handle.

Personalised Service

Consumers are well-accustomed to personalised products and services, and expect the same from their customer service interactions. In this way, customer service staff will increasingly be expected to leverage information to have a deep understanding of who customers are and personalise the support they provide them. The more context a staff member has about a customer, their unique use case and common challenges, the more they can personalise each customer service interaction. This has also been called ‘conversational support’ because it’s support that feels like having a real conversation with a friend. Conversational support builds stronger customer–brand relationships, and it is becoming more important as customers naturally migrate to companies they feel align with their values. Personalising customer service efforts also empowers staff to deliver more relevant answers that resonate with and address the unique needs of each customer.

Proactive Service

One of the most effective ways to create customer confidence is to practise proactive customer service. By definition, proactive service means identifying and resolving customer issues before they become problems, while reactive service means responding to problems after they are raised by customers. In practising proactive customer service, it is important to let the customer know in advance about a problem and share what is being done to address it. Providing updates along the way is also important. Companies can do this by monitoring the interactions every customer has with the company, assessing and analysing the underlying sentiment. Often referred to as ’customer health monitoring’ or similar, this proactive approach is the difference between good and great customer service. Indeed, proactive customer service can result in a number of business benefits, including increased customer loyalty, decreased service calls, and greater control over communication.

Virtual Assistance

Virtual assistants (VA) are set to become dominant forces in the future customer service landscape. Devices that provide such assistance are conditioning consumers to expect answers to any question at any time. In time, VAs will become conversational, allowing a consumer to ask a series of deeper questions on given topics, as well as contextual, able to tap into data sources outside of the corporate knowledge base. Further still, VAs will start learning from staff-assisted service interactions, and will move from living on corporate websites to becoming embedded in wearables and connected devices. In this way, VAs will be able to provide customer service staff with live context for customer interactions, reducing the need for the customer to repeat information or actions.

Best Practice Leadership

Enhance digital, but not at the expense of traditional

Consumers want more choice in how they contact companies for service. However, while digital allows companies to interact with consumers in new ways and to automate elements of the service experience, a human touch is key to loyal and ongoing customer relationships. Companies need to understand what customers require and offer the appropriate digital or human customer service to meet their needs.

Be where customers are

Consumers want to use the channel(s) most convenient for them in the moment. Therefore, companies need to understand which channels their customers prefer to use and at which point of the service journey they wish to use them. It is also important to ensure that customers can access and experience the same standard of service support across channels.

Service customers personally

Companies need to analyse their customers, including key buyer behaviours, purchase histories, interactions, and satisfaction scores, using both structured and unstructured data sources. This information provides a detailed picture of individual customers and enables the delivery of personalised, more human customer service, even via digital channels.

Focus on efficiency and convenience

Companies need to optimise and streamline customer service processes. For example, rather than have customers repeat their issue and history each time they speak to a new staff member, systems can allow staff to see the context around who they’re speaking with. Not only does this help staff members solve issues faster, but it reduces the customer’s overall effort.

Capture and address customer feedback

To deliver superior customer service, it is critical to reach out and obtain customer feedback on their experiences, as well as opportunities for enhancement. Companies must also act on that feedback and share any relevant information with customers. Customers who feel heard are more connected to the brand individually, and thus are more likely to be an advocate.

Empower staff to provide exceptional service

Human interaction plays an important part in achieving customer satisfaction and service excellence. As such, frontline staff play a vital role in the delivery of customer service. In doing so, staff need tools and data that enable them to understand the customer, apply a personal touch, and surprise and delight when they can, while effectively and efficiently solving service issues.

Key Takeouts

Customer service is evolving, which is a welcome development for both brands and consumers. Beyond simply solving consumer problems, customer service offers a unique way to enhance the customer experience, boost satisfaction and contribute to more engaging and cost-effective customer service strategy. Today, a customer service experience should be efficient, in-the-moment and highly personalised.

  • Customer service is a key differentiator Now more than ever, companies that are looking to differentiate in this hyper-connected world are reimagining and redefining their customer–brand relationship by investing in a high-quality and differentiated customer service experience.
  • Multichannel is the new normal Consumers expect seamless and integrated customer service, regardless of the channel. Offering multichannel customer service, whereby interactions with real people (either on the phone or in person) and digital channels complement rather than compete with each other, enhances the overall customer service experience.
  • The human element remains crucial to effective customer service delivery While consumers are embracing digital channels and self-serving, they are still calling for human support and engagement. Within a broader customer service channel mix, consumers want the option to interact with a ‘real’ person and that is unable to be replicated via digital channels.
  • Consistent delivery of a positive customer service experience is paramount A positive or negative customer service experience has a profound impact on consumer purchase intentions and behaviour. Excellent customer service is and will remain essential to successful customer –brand relationships.
  • It’s time to ‘wow’ customers with service The future of customer service has evolved from a transactional mindset to one that is about deepening connections with consumers, adding value beyond simply providing assistance and resolving queries.

This whitepaper was first published by Swinburne University.


You Might also Like