Singapore – Customer service continues to be a primary point of contact for consumers seeking help from businesses, playing a central role in shaping customer perceptions and loyalty, a new report from Accenture Song notes. Often described as a “first responder” in customer experience, service interactions can influence whether customers remain loyal or disengage from a brand.
Automation reshapes service interactions
Many consumers report growing frustration as companies increasingly direct them toward automated tools such as interactive voice response (IVR) systems, self-service applications and chatbots. While intended to improve efficiency, these technologies are frequently perceived as obstacles to resolution, leaving customers dissatisfied and without clear outcomes.
Research points to declining customer experience
The new report suggests that the expansion of high-tech service touchpoints is reshaping customer experience, often with negative effects. Customer service remains a key differentiator between businesses, with 64% of consumers citing service quality as the single most important factor separating one company from another. Among consumers who reported a recent negative service experience, 87% said they would likely avoid the company in the future.
Consumers feel burdened by service technology
The research highlights dissatisfaction with how service innovation has evolved. Only 32% of respondents believe service has improved over the past five years, while just 18% say technology has significantly enhanced their service experiences. A majority of consumers, 78%, expressed a preference for direct interaction with a customer service representative. One sentiment captured in the findings states, “It is becoming more work to be a customer.”
Cost pressures reshape service priorities
From an organisational perspective, the report indicates that many businesses are prioritising cost control over customer value creation. Since Accenture’s previous customer service report in 2022, the number of executives who say their service departments primarily exist to create value for customers has declined by 60%. Nearly half of customer service-focused executives (46%) identified controlling costs as their main concern, while 64% said they are actively making trade-offs between cost efficiency and customer satisfaction.
While 62% of executives reported successfully reducing operating costs over the past three years, only 45% said they had improved customer retention over the same period.
Strong service outcomes linked to generative AI use
The research identifies notable differences between companies with strong customer service outcomes and those lagging behind. Organisations with better service performance are more likely to use generative AI to support service representatives, resolve issues more quickly and personalise digital channels. These companies are 82% more likely to use generative AI to help representatives resolve issues, 50% more likely to use it for real-time problem resolution and 87% more likely to deploy it to personalise digital channels.
Predictive capabilities remain underutilised
The report’s findings also point to the growing importance of predictive, data-driven customer service. Companies with stronger service outcomes are 48% more likely to invest heavily in generative AI to improve predictive capabilities. Despite this, only 14% of executives surveyed said their organisations regularly use data-generated insights to enhance customer service.
The report suggests that analysing customer behavior patterns and real-time data can enable businesses to anticipate issues, intervene earlier and shift from reactive service models to proactive experiences.
Service insights seen as an untapped organisational asset
The research also highlights ongoing challenges with siloed customer service functions, which can lead to fragmented processes and inconsistent messaging. It argues that customer service interactions have the potential to serve as a centralised source of customer intelligence, particularly as generative AI enables organisations to analyse unstructured data at scale.
High-performing organisations are already using service insights more broadly. They are 57% more likely to apply customer service insights to enterprise processes such as product development and go-to-market strategies, and those with the strongest service functions are 87% more likely to say that customer service plays a critical role in shaping marketing strategy.
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Overall, the findings suggest that while technology continues to transform customer service, businesses face increasing pressure to balance operational efficiency with meaningful, personalised and human-centered experiences if they want to maintain customer trust and long-term loyalty.
