State of Service Report 2022: Amid shifting and pervasive challenges, service organizations’ North Star remains the same: an unwavering focus on customer success.
Customer service is at the core of customer experience, and has arguably seen more change and elevated importance over the past years than any other business function, this according to the 2022 State of Service Report from Salesforce. In the fifth edition of “State of Service” report, Salesforce Research surveyed 8,050 customer service professionals to determine how service organizations continue to adapt to an ever more digital-first environment, future plans for investments in people, processes, and technology, and approaches to talent management and development in a challenging labor market.
Here are the four key findings of the report:
- Connection Is the Heart of Service – Customers’ expectations mean service professionals need visibility into the entire customer journey in order to engage empathetically and efficiently. Efforts to connect the entire customer journey are well underway. Sixty-two percent of service pros say all departments use the same CRM software.
- Digital Engagement Becomes the Norm – The pandemic sent an increasing number of customers to digital channels. As their expectations rise and habits change, they aren’t turning back. Adoption of video support has increased by 47% since 2020. 02
- Customer Service Extends to the Doorstep – The contact center remains critical, but physical, onsite service is an increasingly important factor in delivering customer success. Eighty-six percent of decision makers at organizations with field service say it’s critical to scaling their business.
- Labor Dynamics Put Focus on Agent Experience – As job mobility spiked over the past months and years, service organizations have a renewed focus on skill sets and perks even as economic headwinds signal future challenges. Service organizations have experienced an average reported turnover rate of 19% over the past year.
Previous research has shown that 48% of customers have switched brands for better customer service, and 94% say good customer service makes them more likely to make another purchase. Research found that 88% of customers say the experience a company provides is as important as its product or services — up from 80% in 2020. Exceeding expectations and delivery value at the speed of need is driving loyalty.
Case in point: The share of service organizations tracking case deflection — often achieved through self-service tools for customers or automated processes — jumped by 20% since 2020. A closer look into the State of Service Report 2022 uncovers 10 very powerful trends that will shape the future success of service organizations.
Customer Service key performance indicators (KPIs)
Connection is the heart of service
TREND 1 – Customer service differentiation with empathy. Empathy is a cornerstone of superior, differentiated customer service, but it’s also elusive. In fact, 73% of customers expect companies to understand their unique needs and expectations, yet 56% say most companies treat them like numbers. High-performing service organizations — those with the highest self-assessments of customer satisfaction — heed customers’ calls for empathy on two fronts: information and policy. Agents on high-performing teams are significantly more likely than peers at other organizations to have a complete understanding of customer needs and be less likely to be bound by inflexible policies that don’t take into account a customer’s individual circumstances.
TREND 2 – The customer experience does not start and end with customer service alone. Sixty percent of customers say it generally feels like they’re communicating with separate departments, not one company, and 66% often have to repeat or re-explain information to different representatives. While high performers are the most likely to describe their relationships with other departments as connected, rather than siloed, such cross-functional relationships are now the norm across all service organizations. Sixty-two percent of service professionals say all departments use the same CRM software.
Shared view of the customer is key to ensure speed, empathy and intelligent engagements
TREND 3 – Speed to resolution ensures long-term connections. Personalized, empathetic, and connected service is not the only thing customers seek today: They also expect speedy resolutions to their issues. Eighty-three percent of customers expect to interact with someone immediately upon contact, and 83% expect to resolve complex problems through one person. Seventy-eight percent of service agents say it’s difficult to balance speed and quality — up substantially from 63% who agreed in 2020. Automation and AI are key technologies to bolster speed of resolution. The share of service decision makers who report using AI has increased by 88% since 2020, from 24% of respondents to 45%.
The usage and benefits of automation in service organizations
Digital engagements become the norm
TREND 4 – Adoption of digital engagement channels are grown. Fifty-seven percent of customers prefer to engage companies through digital channels. Self-service, a notable tool in the pursuit of case deflection during a time of efficiency initiatives, remains a popular win-win for service organizations seeking cost savings and customers seeking quick resolutions. Fifty-nine percent of customers prefer self-service tools for simple questions/issues. The phone option still matters most for complex services. Eighty-one percent of service professionals say the phone is a preferred channel for complex issues — up from 76% in 2020.
Adoption of digital channels in service industry
TREND 5 – There is a decline with service organizations partnering with IT to deliver innovative engagement solutions. This is not positive news. Today, over one-third (37%) of organizations say IT is the sole decision maker, compared to 25% in 2020, and the share of service organizations cutting IT out of such processes entirely, while small, has more than doubled to 13% 77% of decision makers who partner with IT say it helps the organization save on software cost, and 79% say it results in faster time-to-market for new technology solutions.
The partnership between IT and Service is declining overtime – not a favorable trend
Customer service expands to doorstep
TREND 6 – Businesses are investing significantly in field service capabilities. Field service — support capabilities brought straight to the customer’s doorstep — is the object of significant investment across industries. The vast majority of decision makers at organizations with field service view it as a key element of their business model, as well as an additional sales channel. Field service is no longer limited to industries like manufacturing and utilities. Many high-touch consumer brands now deliver service to the doorstep. In fact, 79% of service decision makers across industries view mobility — the ability to work from anywhere with all necessary information — as a priority.
The business benefits of field service
TREND 7 – Field service professionals have the right tools, but the function is hard to scale. Nine in 10 frontline service workers are satisfied with the timeliness, accessibility, and accuracy of the information they have in the field, the agility their technology enables, and the overall level of service they can provide. Yet obstacles remain on the field service technology front, particularly as organizations turn to contractors to scale their offerings. An average of 33% of frontline service workforces are comprised of contractors, and 80% of decision makers say adequately equipping them is a challenge.
Labor dynamics put focus on the agent experience
TREND 8 – Retaining talented service professionals is super difficult. Service professionals report an average turnover rate of 19% over the past year. Eighty-five percent of decision makers agree there is a direct link between employee experience and customer experience. As such, there have been a slew of employee experience initiatives at service organizations since the pandemic took hold, perhaps because of the downstream impacts on customer loyalty, retention, and more. Flexible schedules, wellness benefits, and career development improvements are the most popular perks for employees, but struggles remain. There is some good news: 85% of agents say they have a clear path for career growth — up from 67% in 2020 and 59% in 2018.
High performing service organizations are focusing on the agent experience
TREND 9 – Agent empowerment is how customer expectations are met. High customer expectations means that service organizations must empower their employees with a wide range of both hard and soft skills, and given high turnover rates, training is also important for onboarding new employees and ramping them up quickly. 81% of decision makers say they’re making significant investments in training — up from 79% in 2020 and 77% in 2018.
The most important service agent skills
TREND 10 – Service organizations must adopt a hybrid work model in order to recruit and retain talent. Arguably the most consequential impact on labor dynamics over the recent past — for service teams as well as other departments — has been the shift away from physical offices as the default work setting. Indeed, just over one-third (35%) of service professionals now report working primarily from a dedicated physical location like an office or store. Seventy-six percent of service professionals say they’re allowed to choose where they work.
The key to service agent retention is a hybrid work model
Another interesting findings of the report was a spotlight on an important role for businesses: the chief customer officer. I served as a chief customer officer for many years before joining Salesforce. Service organizations are embracing a new role responsible for customer loyalty and happiness: the chief customer officer. The report found that 54% of service professionals say management views customer service as a revenue generator, rather than a business cost.
In a decentralized, digital-first hyper connected and sharing economy, customers service is marketing. Your brand is what people say about you when you are not in the room. What people like to talk about is an exceptional customer service experience, or a very poor one. Your brand promise is dependent on the delivery quality of your customer service organization. The biggest competitive advantage in today’s economy, given the elevated set of customer expectations, is service quality. Invest in it. The return on your investment may just be your ability to earn the future business of your customers and prospects. And if you truly want to improve the customer experience, start with the employee experience.
The State of Services 2022 Report is quite comprehensive with deep insights into these 10 trends. To learn more you can access the report here.