Industry Research : The Smart Home is Creating Frustrated Consumers
More than one in three US adults experience issues setting up or operating a connected device according to data released from the Customer and Product Experience 360 (CPX 360 ™) Survey by iQor, a global managed services provider embedded in the flow between product, people and services.
The promise of the Internet of Things is that it will simplify our tasks, secure our homes and transform our lives with assistants, automated tasks and data insights through a new generation of connected devices that all work seamlessly together. Many consumers, however, are losing faith in the connected utopia as they struggle with setup and installation issues and disjointed technical support involving multiple people at multiple companies.
Tech-savvy early adopter consumers are frustrated, and many are abandoning efforts to link their devices together, potentially losing out on the full value of the connected ecosystem. According to the CPX 360 survey, consumers report having to take more than eight steps to resolve a technical problem or issue with a smart device. Further, consumers are spending, on average, close to 1.5 hours of their own time resolving these issues and one hour working with customer service. Nearly one in four consumers (22 percent) couldn’t resolve the issue or simply gave up, and returned the product for a refund.
Connected device adoption is still in its infancy, but Gartner reports that IoT-enabled devices will reach 20.4 billion globally by 2020, almost doubling from an estimated 11.1 billion in 2018. The CPX 360 survey polled tech savvy early adopters, indicating that as adoption becomes mainstream, consumer frustration is likely to cascade unless companies act now to improve their support and resolution process to create a much more streamlined and integrated adoption and set up process for consumers.
Dealing with Multiple People and Companies is Extremely Annoying
Throughout the customer and product service journey, the CPX 360 survey reports consumers dealt with an average of 2.1 companies, over 2.7 sessions and with 3.1 different people as they attempted to install and engage with new connected technology in their home. For seventeen percent of respondents, the challenge was even greater and involved dealing with five or more people when trying to resolve an issue.
Lack of Data Retention Across Channels Delays Issue Resolution
The inability to provide a seamless, frictionless experience across all support channels creates frustration and confusion for the consumer as they interact with multiple people and companies in the resolution process. Throughout this process, only about one in three indicate their information was always retained between customer service steps. Among those whose information was not retained, 81 percent indicated this delayed their resolution and 85 percent found it to be somewhat or extremely annoying.
"Adoption of connected devices is on the verge of transitioning from early adopters to the mainstream as popularity and integration of IoT expands and homes become smarter," said Autumn Braswell, COO of iQor. "It is crucial that organizations streamline and improve the support process now to reduce the number of steps, people and brands required to unlock the intended value of the connected device and ensure that the customer service challenges are addressed before mass adoption."
Consumers Seek Self-Help and Digital Solutions in Resolution Process
Although early adopters, and millennials, take more steps to resolve an issue before connecting with customer support because they believe they have the technical knowledge to solve the problem on their own, very few consumers overall start the resolution process by engaging with customer service.
More than half of consumers (59 percent) read the instructions/manual provided as their first step to solve an issue and nearly one in five (14 percent) asked a friend or family member for help. On average, consumers surveyed take more than eight steps to resolve an issue and the typical journey is: read instructions, visit manufacturer’s website, searched on Google, explore other websites, call manufacturer’s customer service hotline and return for repair or replacement.
Of note, the step judged highest for the combination of effectiveness and convenience is YouTube, and nearly half of consumers (47 percent) used YouTube as an interim step in the resolution process.
Frustrated Consumers and Easy Return Policies Driving Costs
Frustrated consumers combined with lax return policies is creating a surplus of connected devices that are sent back, often with nothing wrong with them. The CPX 360 Survey reports that 22 percent of consumers dealing with a connected device issue chose to return the product for a refund.
There is a strong correlation between being dissatisfied with the problem resolution process and customer service being more complex, taking longer and information not being retained between steps; those experiencing dissatisfaction are far less likely to have fixed or resolved their problem on their own or with customer service, and far more likely to make a return for a refund. Based on iQor’s experience, 15-30 percent of returned products have nothing wrong with them; in some product areas, this figure is as high as 65 percent.
The cost to the US economy for returns is $260 Billion a year. According to Deloitte, many technology brands spend 9-15 percent of their revenue handling returns.
"Connected devices are improving lives globally but, as devices become more complex and the IoT ecosystem expands, brands need to rethink their service models or else face even more frustrated consumers and unnecessary, costly returns," said Hartmut Liebel, CEO of iQor. "Connecting the consumer and product journeys, and using those insights to make consumer experience more frictionless and less frustrating, is a matter of concern for industry and consumers."
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iQor is a global provider of business process outsourcing and product support services with 32,000 employees in 17 countries. We partner with many of the world’s best-known brands to deliver aftermarket product and customer support solutions that span the consumer value chain, from customer care and receivables management to product diagnostics and repair services. Our award-winning technology, logistics and analytics platforms enable us to measure, monitor and analyze brand interactions, improve business processes and find operational efficiencies that lead to superior outcomes for our partners across the customer and product lifecycles.
Published: Friday, February 9, 2018
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