case study on quality customer service

Customer Service Case Studies: Real-Life Examples Of Service Scenarios.

Are you looking for real-life examples of customer service scenarios that can help you improve your own customer service skills? Look no further!

In this article, we will explore a series of case studies that highlight different aspects of effective customer service. These case studies will provide you with valuable insights into how to handle challenging situations, resolve issues, and create positive experiences for your customers.

Customer service plays a crucial role in the success of any business. It is not just about answering phone calls or responding to emails; it is about building relationships and exceeding customer expectations. By studying real-life examples, you can gain a deeper understanding of the importance of effective customer service and learn strategies to enhance your own skills.

In each case study, we will delve into different scenarios and examine how businesses successfully handled them. From resolving product quality issues to dealing with difficult customers, these case studies will showcase various approaches and solutions that you can apply in your own work.

Get ready to dive into these insightful stories that demonstrate the power of exceptional customer service!

Table of Contents

Key Takeaways

• Effective customer service is crucial for the success of a business.
• Empathy and proactive customer service are essential aspects of providing excellent customer service.
• Prompt resolution of product quality issues, with notification and compensation for affected customers, helps maintain customer satisfaction and loyalty.
• Handling difficult customers with a calm and empathetic approach, offering alternatives, and empowering them to make choices can build trust and loyalty.

The Importance of Effective Customer Service

You can’t underestimate the impact of great customer service – it’s like a warm cup of coffee on a chilly morning, instantly making you feel valued and appreciated.

In today’s competitive business landscape, providing effective customer service is more important than ever. Customers have numerous options at their fingertips, and one bad experience can send them running to your competitors. That’s why empathy plays a crucial role in customer service.

When customers feel understood and cared for, they’re more likely to become loyal advocates for your brand. Empathy is the ability to understand and share the feelings of others. In customer service, this means putting yourself in the shoes of your customers and genuinely listening to their concerns.

By showing empathy, you demonstrate that you value their emotions and are committed to finding a solution that meets their needs. This not only helps resolve issues effectively but also builds trust and strengthens the relationship with your customers.

Proactive customer service is another essential aspect of providing exceptional support. Instead of waiting for customers to come to you with problems or complaints, proactive customer service involves anticipating their needs and addressing any potential issues before they arise.

This approach shows that you’re dedicated to delivering an outstanding experience from start to finish. By taking the initiative, you can prevent problems from escalating and create positive interactions that leave a lasting impression on your customers.

The importance of effective customer service cannot be overstated. Empathy allows you to connect with your customers on a deeper level by understanding their emotions and concerns. Proactive customer service demonstrates your commitment to going above and beyond expectations by anticipating needs before they become problems.

By prioritizing these aspects in your approach to customer service, you can foster loyalty, build strong relationships with customers, and ultimately drive success for your business.

Case Study 1: Resolving a Product Quality Issue

Resolving a product quality issue can be challenging, but did you know that 86% of customers are more likely to repurchase from a company that resolves their complaint? When faced with a product quality issue, it’s important for companies to take immediate action and address the problem effectively.

One notable case study involves a product recall due to safety concerns. The company promptly notified customers about the recall through multiple channels such as email, social media, and website announcements. This proactive approach not only ensured customer safety but also demonstrated the company’s commitment to resolving the issue.

To further enhance customer satisfaction during this challenging time, the company offered compensation to affected customers. The compensation included a full refund for the recalled product as well as additional discounts on future purchases. By going above and beyond in compensating their customers, the company not only mitigated any potential negative feelings but also showed genuine concern for their customers’ wellbeing.

In addition to addressing individual complaints, the company took steps towards preventing similar issues in the future. They implemented stricter quality control measures throughout their production process and conducted thorough inspections before releasing any products into the market. This proactive approach reassured customers that their concerns were taken seriously and instilled confidence in the brand’s commitment to delivering high-quality products.

By resolving a product quality issue promptly and ensuring customer satisfaction through compensation and preventive measures, companies can not only retain existing customers but also build trust with new ones. It’s crucial for businesses to recognize that effective customer service goes beyond simply resolving complaints; it requires taking responsibility for failures, implementing meaningful solutions, and continuously improving processes to prevent similar issues from arising again in the future.

Case Study 2: Handling a Difficult Customer

Navigating through challenging interactions with clients can be a test of your company’s ability to handle difficult situations. Dealing with angry customers requires a delicate balance of empathy, patience, and problem-solving skills.

One real-life example of a company successfully managing a difficult situation involved an irate customer who had received a damaged product.

In this case, the customer contacted the company’s customer service department immediately after receiving the damaged product. The representative on the phone remained calm and empathetic throughout the conversation, acknowledging the customer’s frustration. They apologized sincerely for any inconvenience caused and assured the customer that they would resolve the issue promptly.

The representative then offered several options to address the problem, including sending a replacement or providing a refund. By presenting these alternatives, they empowered the customer to choose what solution best suited their needs. This approach helped defuse tension and created an atmosphere of collaboration rather than confrontation.

Ultimately, by effectively managing this difficult situation and prioritizing customer satisfaction, the company not only resolved the issue but also built trust and loyalty with their client base.

Case Study 3: Going Above and Beyond for a Customer

Exceeding expectations and leaving a lasting impression, one company went the extra mile to ensure a memorable experience for a dissatisfied client. The customer, let’s call her Sarah, had purchased a high-end laptop from this company but encountered numerous technical issues soon after receiving it. Frustrated with the product’s performance and the lack of support she received initially, Sarah reached out to the company’s customer service department for assistance.

To address Sarah’s concerns promptly, the customer service representative assigned to her case took immediate action. Recognizing that resolving her technical issues alone would not suffice in restoring Sarah’s trust and satisfaction, they decided to go above and beyond what was expected. The representative personally followed up with Sarah daily to provide updates on their progress in fixing her laptop. They also offered additional compensation for the inconvenience caused by sending her a complimentary accessory package.

In addition to their exceptional level of communication, this company created a personalized experience for Sarah through small gestures that left an indelible mark on her overall perception of their brand. One example was when they surprised her by upgrading her laptop’s warranty without any additional cost. This unexpected act not only demonstrated their commitment to providing quality products but also highlighted their dedication towards ensuring customer satisfaction.

By going above and beyond in addressing Sarah’s concerns and surpassing her expectations at every turn, this company exemplified outstanding customer service. Their proactive approach not only resolved technical issues efficiently but also left a lasting impression on Sarah concerning how much they valued her as a loyal customer. Through personalized attention, generous compensation, and unexpected upgrades, they not only ensured Sarah’s satisfaction but also fostered a long-term relationship based on trust and loyalty. This case study serves as a powerful reminder that going the extra mile can make all the difference in customer satisfaction and retention.

Case Study 4: Turning a Negative Review into a Positive Experience

If your business has ever received negative feedback, it’s important to know how to turn that experience into a positive one.

In this case study, we will explore how a business addressed a customer’s concerns and transformed their perception from negative to positive.

By taking the necessary steps and going above and beyond, the business not only resolved the issue but also improved their reputation in the process.

The negative feedback received by the business

Despite your best efforts, your business was bombarded with a barrage of scathing feedback that left you reeling. Customers expressed their dissatisfaction with the quality of your products and the poor customer service they received.

These negative reviews not only affected customer retention but also posed a threat to your brand reputation. The negative feedback highlighted areas where improvements were needed. It pointed out flaws in your product design, manufacturing processes, and communication channels.

While it may be disheartening to receive such criticism, it presents an opportunity for you to address these issues and enhance the overall customer experience. By acknowledging the shortcomings and taking immediate action to rectify them, you can regain customers’ trust and loyalty while rebuilding your brand’s reputation.

The steps taken to address the customer’s concerns

After receiving the negative feedback, we quickly took action to address the customer’s concerns and improve our products and services. We understand that addressing customer complaints is essential for maintaining a positive reputation and ensuring customer satisfaction.

Our first step was to reach out to the customer directly, expressing our apologies for any inconvenience caused and assuring them that their concerns were being taken seriously.

To resolve the customer’s issues, we implemented a thorough investigation into the matter. This involved examining the specific details of their complaint, evaluating our internal processes, and identifying any areas where improvements could be made. By conducting this analysis, we were able to pinpoint the root cause of the problem and develop an effective solution.

Once we identified areas for improvement, we promptly made necessary changes to prevent similar issues from occurring in the future. This included updating our training programs for staff members involved in customer service interactions and enhancing quality control measures throughout our production process. We also communicated these updates transparently with all relevant stakeholders to ensure everyone understood our commitment to resolving customer issues.

Addressing customer complaints is not just about solving individual problems; it is about continuously improving our overall products and services. By taking immediate action upon receiving negative feedback, we demonstrate our dedication to providing exceptional experiences for every customer.

We remain committed to resolving any issues promptly while striving to exceed expectations in delivering high-quality products and top-notch service.

The transformation of the customer’s perception and improved reputation

Now that the steps have been taken to address the customer’s concerns, let’s discuss the transformation of their perception and the improved reputation of your business.

By promptly addressing the customer’s issues and providing a satisfactory resolution, you’ve demonstrated your commitment to customer satisfaction. This level of responsiveness not only resolves the immediate problem but also leaves a lasting impression on the customer.

As a result, their perception of your brand is likely to improve significantly. They’ll appreciate your willingness to listen, understand, and take action to rectify any issues they may have faced. This positive experience can lead to increased brand loyalty as customers recognize that you value their feedback and are committed to delivering exceptional service.

To further enhance customer satisfaction and foster brand loyalty, consider implementing these strategies:

• Personalized follow-up: Reach out to customers after resolving their concerns with personalized messages or phone calls. This gesture shows that you genuinely care about their experience and want to ensure their ongoing satisfaction.
• Proactive communication: Keep customers informed about any changes or improvements related to the issue they encountered. Sharing updates showcases transparency and builds trust in your ability to continuously improve.
• Loyalty rewards program: Offer incentives or exclusive benefits for loyal customers who continue choosing your brand despite any initial challenges they may have faced. Rewarding their loyalty encourages repeat business and strengthens long-term relationships.

By investing in improving customer satisfaction and building brand loyalty, you can create a positive reputation for your business while fostering long-term success in an increasingly competitive market.

Frequently Asked Questions

What are the key elements of effective customer service.

Effective customer service requires several key elements.

One interesting statistic is that 86% of customers are willing to pay more for a better customer experience. This highlights the importance of providing exceptional service.

Effective communication plays a crucial role in customer service as it allows you to understand the needs and concerns of your customers, while also conveying information clearly and concisely.

Empathy and understanding are equally important, as they enable you to connect with customers on an emotional level, showing them that their satisfaction is your top priority.

By incorporating these elements into your customer service approach, you can create positive experiences that leave a lasting impression on your customers.

How can companies measure the success of their customer service efforts?

To measure the success of your customer service efforts, you can utilize various customer satisfaction metrics and conduct thorough customer feedback analysis.

Customer satisfaction metrics, such as Net Promoter Score (NPS) or Customer Effort Score (CES), provide valuable insights into how satisfied your customers are with the service they received. These metrics allow you to quantify customer sentiment and identify areas for improvement.

Additionally, analyzing customer feedback through surveys or social media monitoring enables you to understand specific pain points and address them proactively.

By consistently measuring these indicators and taking action based on the results, you can continuously enhance your customer service performance and ensure a positive experience for your customers.

What are some common challenges faced by customer service representatives?

Handling difficult customers and managing high call volumes can be incredibly challenging for customer service representatives. Dealing with irate customers can feel like trying to calm a hurricane with a feather, as their frustrations can reach astronomical levels. It requires an extraordinary level of patience and empathy to navigate through their anger and find a resolution that satisfies both parties.

Additionally, managing high call volumes can feel like juggling flaming swords while walking on a tightrope. The constant influx of calls puts immense pressure on representatives to provide quick and efficient assistance without compromising the quality of service.

However, despite these Herculean tasks, customer service representatives rise above the challenges by employing exceptional communication skills, problem-solving abilities, and an unwavering commitment to customer satisfaction.

How can companies improve their customer service skills and knowledge?

To improve their customer service skills and knowledge, companies should invest in comprehensive training programs that provide employees with the necessary tools and techniques to handle different scenarios. These programs can include modules on effective communication, problem-solving, and empathy to ensure that representatives are equipped to handle any customer interactions.

Additionally, implementing feedback systems that allow customers to provide their input and suggestions can also be beneficial. This feedback can help identify areas for improvement and enable companies to make necessary adjustments in their processes or training programs.

By prioritizing ongoing training initiatives and actively seeking customer feedback, companies can continually enhance their customer service skills and knowledge, leading to improved overall customer satisfaction levels.

What are some best practices for handling customer complaints and resolving issues?

When it comes to handling customer complaints and resolving issues, think of yourself as a skilled navigator guiding a ship through stormy waters. Customer feedback is like the wind, sometimes gentle and other times fierce, but always pushing you towards improvement.

Conflict resolution is your compass, helping you find the right path to address concerns and turn unhappy customers into satisfied ones. Actively listen to their grievances, empathize with their frustrations, and offer swift solutions that demonstrate your commitment to their satisfaction.

By taking ownership of the problem and going above and beyond to resolve it, you can transform a dissatisfied customer into a loyal advocate for your brand.

In conclusion, effective customer service is crucial for businesses to thrive in today’s competitive market. As demonstrated by the case studies discussed, handling product quality issues, difficult customers, and negative reviews with empathy and proactive solutions can turn potentially negative experiences into positive ones.

One interesting statistic that highlights the impact of great customer service is that 86% of consumers are willing to pay more for a better customer experience (Source: PwC). This statistic evokes an emotional response as it emphasizes the value customers place on exceptional service. By investing in providing top-notch customer service, businesses not only create loyal customers but also have the potential to increase their revenue.

To ensure success in customer service scenarios, it is essential for businesses to empower their employees with proper training and resources. By equipping them with problem-solving skills, effective communication techniques, and a genuine desire to help customers, companies can build strong relationships and foster trust. Additionally, embracing technology solutions such as AI-powered chatbots or self-service options can streamline processes and provide faster resolutions.

In summary, delivering exceptional customer service requires a proactive approach that focuses on resolving issues promptly while exceeding expectations. By prioritizing the needs of customers and going above and beyond to provide personalized solutions, businesses can create memorable experiences that result in increased customer satisfaction and loyalty. Remember, investing in superior customer service is not just about satisfying your current customers; it’s about attracting new ones who’re willing to pay more for an outstanding experience.

The eSoft Editorial Team, a blend of experienced professionals, leaders, and academics, specializes in soft skills, leadership, management, and personal and professional development. Committed to delivering thoroughly researched, high-quality, and reliable content, they abide by strict editorial guidelines ensuring accuracy and currency. Each article crafted is not merely informative but serves as a catalyst for growth, empowering individuals and organizations. As enablers, their trusted insights shape the leaders and organizations of tomorrow.

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Customer Experience

11 great customer service examples in 2023

Excellent customer service is essential for business. In fact, consumers are willing to spend 17 percent more with companies that deliver great customer service, according to American Express .

Unfortunately, it’s true that bad news travels faster than good news, especially in the age of social media. Most customer service stories online are about a bad customer service experience, and consequently, you don’t always hear about companies who are achieving customer satisfaction.

Keep scrolling to find customer service examples that will inspire, as well as tips for improving your customer experience.

What does excellent customer service look like?

The definition of “good” customer service is flexible, because it entirely depends on the level of expectation that customers have for your brand. This can be affected by variables such as your industry, product cost, brand reputation and more.

For example, if you’re flying in Economy, you don’t expect a 5* service with champagne and snacks - but if you were flying Business class, you’d be annoyed if those things weren’t provided for the higher cost of your seat.

What consumers expect from your customer service experience is the key factor in whether they perceive your brand to be great or terrible. Do they want to be able to resolve issues on multiple channels, or do they go to one channel for specific problems? Is your average response time more important to them, or is it how many self-service options you provide that matters? Is poor customer service the main reason why they might try a competitor?

Your support teams are your front line, shaping customer experience on a day-to-day basis. They can be proactively helpful in providing customer service that’s memorable, and turn a bad customer service experience around.

Investing in great service is worth your while. Don’t lose customers and brand loyalty by failing to meet and exceed expectations - grow your business’ revenue by ensuring that your excellent service keeps customers coming back.

Examples of good customer service experiences are more often than not the result of a kind, customer-centric service agents who are good at the following things:

Good customer service examples

• Responding quickly: A customer will appreciate fast response times when they want to ask a question or highlight a problem.
• Acting on customer feedback: When a customer support agent acts on the feedback they’ve received, it shows them that their opinion mattered.
• Showing empathy: Employees that try to understand a customer’s point of view make a customer feel valued, and can turn an angry customer into a happy one.
• Maintaining customer self-service options: Sometimes customers would prefer to find their own answer to problems rather than getting in touch with your customer service center. Having an up-to-date FAQ page or knowledge article base can be very helpful.
• Providing omnichannel support: Different communication channels can support customers that have busy schedules or want flexibility in how they connect with businesses. Your customer service teams need to be prepared to offer support through email, phone, live chat, and social media.
• Going the extra mile: When an employee is able to deliver excellent customer service beyond the customer’s expectations or adds a personal touch to the service experience, it can leave a positive impression and increase customer loyalty.

A less generalized amd more specific example of enhancing customer satisfaction and building loyalty is by offering discounts and coupons (depending on your industry and needs).

Why is delivering excellent customer service important?

There are several reasons why great customer service is important for your business. Below we list the most important ones.

Satisfied customers will spend more

According to Hubspot , 68 percent of consumers are willing to pay more for products and services from brands associated with excellent customer service. When you invest in delivering great customer service, you’re creating happy customers but also generating enough brand equity to charge a premium for your offering.

Your ROI will improve and profits will increase

Deloitte found that brands that were customer-centric were 60 percent more profitable when they were compared to companies that neglected to focus on customer experience. Your support team should be empowered to provide excellent customer service, not just for the customer’s benefit, but for your brand’s financial benefit as well.

Customers are more likely to forgive you

If you provide good customer service, you can convince customers to return, even if something didn’t go as they expected. Salesforce found that 78 percent of consumers will do business with a brand again after a mistake is made if the customer service is excellent.

Customer loyalty improves with great customer service

Microsoft says that a whopping 96 percent of customers believe customer service is vital when they’re choosing to be loyal to a brand. If you don’t provide customer service that meets expectations when dealing with an upset customer, you risk alienating them from returning to spend more. Quality service will help you to increase customer lifetime value.

A great customer experience means a higher chance of recommendations

Consumers who have a good customer service experience are more likely to recommend your brand to other people. Our own XM Institute found that consumers who rate a brand’s service as “good” are 38% more likely to recommend that company to others.

Real-life examples of great customer service

It's one thing to talk about what good customer service is in theory, and another to apply it to real-world companies. Below are eleven customer service examples from companies that go above and beyond, as well as the customer service tips we’ve taken from their stories.

• JetBlue - Thank frequent customers with small gestures
• Tesla - Meet your customers where they're at
• Adobe - Respond to customer service complaints before they happen
• Trader Joe's - Help those in time of need
• Coca-Cola - Get involved in social causes
• Zappos - Personally reply to every email
• Us! - Provide an exceptional event experience
• Sainsbury’s – Don't be afraid to change everything
• American Express – Give customers benefits that can be used globally
• Walmart - Invite customers into the company family
• The Ritz-Carlton Hotel Company – Turn customer errors into service opportunities

1. JetBlue - Thank frequent customers with small gestures

Paul Brown was flying JetBlue airlines when he casually tweeted that he couldn’t grab his Starbucks coffee before boarding the plane because he was flying out of the smaller terminal at Boston’s Logan airport. Within seconds of seeing the tweet, JetBlue sprang to action and the airport customer service reps delivered a Starbucks venti mocha to his seat on the plane. Brown was elated and raved about JetBlue on Twitter.

Good customer service takeaway : This is definitely one of those great customer examples other companies can learn from. The main takeaway? Your customers don’t always need large gestures, but just want to know they’re appreciated. In fact, 68 percent of customers leave because they perceive you don’t appreciate them.  I’m sure after knowing his request was heard, Mr. Brown feels appreciated and he’ll be a loyal customer for a long time. Keep your company at the top of your customer’s mind, with good customer care by doing small acts for more people, instead of a few large things for a lot of people. Believe it or not, it's the simple things that count and produce loyal and happy customers.

2. Tesla - Meet your customers where they’re at

Tesla literally meets customers where they’re at by going to the customer’s home and fixing issues on their car. It’s convenient for the customer because they don’t have to sit around a repair shop and it can be scheduled on their own time. This is an example of excellent customer service.

Flat tire on Sunday. Called Tesla, git a loaner tire within 40 minutes. Today they came to my house to replace the tire in 10 minutes. scheduled to come back to fix a small issue next week. What other car company does this? @elonmusk @TeslaModel3 @Tesla #mobileservice pic.twitter.com/GiNwOM3RJZ — Chris Kern (@cjk7216) October 31, 2018

3. Adobe - Respond to customer service complaints before they happen

When Adobe had an outage due to an issue with Amazon Web Services, they posted a tweet about it before they started getting customer complaints. The tweet contained a video of a puppy stampede as a distraction and lightened the mood. While there were some comments asking when the program would be running again, many replies focused on the adorable puppies.

Hi all, some Adobe services are down due to the AWS outage: https://t.co/U2qtybaT8J Here's a puppy stampede to take your mind off of it. ? pic.twitter.com/Glv6Anavje — Adobe Customer Care (@AdobeCare) February 28, 2017

4. Trader Joe's - Help those in time of need

An 89-year-old man was stuck in his house during a snowstorm and his granddaughter was worried he wouldn’t have enough food. She called around to several grocery stores and asked if they would deliver, to no avail. Finally, Trader Joe’s said they normally don’t deliver, but they would help. She read off a big list to the store and they delivered the entire order and more within 30 minutes, free of charge.

5. Coca-Cola - Get involved in social causes

Since 1984, Coke has given back more than $1 billion through the Coca-Cola Foundation. What’s great is they give back at the local level and not just to large organizations. For instance, Coke in Ireland initiated the Coca-Cola Thank You Fund , which gives €100K annually to local charities that empower young people, foster sustainability, and encourage diversity and inclusion.

6. Zappos - Personally reply to every email

Zappos responds to every email it receives, even if it’s addressed to the CEO. In this case, a woman sent a request to Tony Hsieh and even though he was unavailable, his representative sent a humorous and engaging email back.

7. Us!  - Provide an exceptional event experience

During many conferences that we attend, we send our  “Qualtrics Dream Team” to fulfill customers' needs and wishes to make the event a truly exceptional experience. From food and drinks, to swag, to even vacations and massages, our team tries to fulfill as many requests as possible. They also collect customer feedback and make changes for a better event experience, such as room temperature and providing phone chargers.

Not a legal comment, but every other company listed here has some example of a customer thanking them for good customer service. I think our example would be stronger if we had something like that.

Curious to know how we run the Dream Team using our own software, or why we bring it to events like #CXOLeadersSummit ? Stop by our booth and we'll share all the secrets! Our team is here till 4pm AEST. pic.twitter.com/pEjfd2Jl8K — Qualtrics (@Qualtrics) August 8, 2018

8. Sainsbury’s – Don't be afraid to change everything

When Sainsbury’s, a UK supermarket chain, received a letter from three-and-a-half-year-old Lily Robinson, they ended up rebranding one of their products entirely. Lily thought their "tiger bread" didn’t resemble a tiger’s stripes at all – it looked more like the pattern on a giraffe. Sainsbury’s responded that the little girl was right and made new labels to share Lily's insight with other customers.

9. American Express – Give customers benefits that can be used globally

American Express maintains their position as a top-tier credit card company by offering its customers plenty of extra benefits: complimentary travel flight credit, insurance, and access to airline lounges to name a few. Combine these worldwide benefits with American Express's 24/7 support line and its global partners network and you have a company that truly connects with you wherever you are.

10. Walmart - Invite customers into the company family

Walmart has a reputation for being focused on providing value to everyday families. They live out their family focus through the way they treat their employees. When one of their associates turned 101 years old, they shared the news on Facebook and invited customers to participate in the celebration.

11. The Ritz-Carlton Hotel Company – Turn customer errors into service opportunities

Ritz-Carlton employees are allowed up to $2,000 to fix any guest problem, no questions asked. One example was told by customer John DiJulius, who left his charger behind at The Ritz-Carlton Sarasota. He received a next-day air package with his charger and a note saying ‘Mr. DiJulius, I wanted to make sure we got this to you right away. I am sure you need it, and, just in case, I sent you an extra charger for your laptop.’

How to provide great customer service

The best way to provide a good customer service experience is to gather feedback, set metrics and take action on your overall customer experience (CX) .

Why not check out our free survey template to collect feedback for customer service and contact centers? You can download it here.

With Qualtrics, you can track key metrics with a customer service benchmark report to help you to understand how your service is improving over time. Track interactions and feedback across the customer journey and customer service experience, and set action into motion to gain customer trust and loyalty.

Best customer service practices: Improving agent effectiveness

Diana Kaemingk

Diana Kaemingk is a contributor to the Qualtrics blog.

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6 Interesting Customer Service Case Studies to Inspire You

July 18, 2023

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An 11-year-old boy’s experience with LEGO customer service changed the company’s brand perception. It’s not only brought in more customers but also justified their lead position in the market. Here, we will discuss a few more interesting customer service case studies.

One good service can not just help one customer but also influence future customers. Reading others’ stories will help you understand ways to overcome new challenges.

I will start with some popular ones.

Popular customer experience case studies

Customer service is not just limited to providing product-related support anymore. We have passed the line way back. As the market gets more critical, everyone is running a few extra miles. Even the top companies in the field are not compromising anything. 

Let’s start with JetBlue’s customer service case study.

JetBlue sets an example of how you can use social media to provide excellent customer service. They have multiple teams at different levels that are active on Twitter. And there are many examples of it.

Here is one: Paul once tweeted that he couldn’t find Starbucks at the gate while boarding the flight. JetBlue immediately responded with an alternative, which was free for him.

Another challenge that JetBlue faced was the winter storm in early January of 2017 . They had to cancel a lot of flights at that time. And because of this, thousands of people were impacted.

The challenge here is that JetBlue cannot change the weather or ensure a safe flight during a storm. But they can provide up-to-date information.

So, they started to tweet updates about the storm and the flight schedule the whole time. As a result, even though the passengers were frustrated, they were happy with JetBlue’s service.

Zappos has a good reputation for providing the best customer support. And it has a lot of interesting customer service case studies. One particular service case created a lot of buzz in the market.

Zappos’s service agent talked with a customer for 10 hours in one call. And, surprisingly, Zappos took it in a positive way. The call wasn’t even about any service. 

This long call started with where and how that customer lives. Then, eventually, it turns into clothing and fashion-related conversation. Finally, the customer ended the call with the purchase of a pair of UGG boots.

It breaks all the records and wins a long-running battle. Which one is better, automated calls or live agents? And without a doubt, it’s the personal touch that steals the crown every time.

This customer service case study is a bit more heartwarming. 11-year-old James Groccia has Asperger’s syndrome. He was looking at an expensive LEGO set for his birthday. It’s the exclusive Emerald Night Train set.

James saved money for two years. The money came from his birthday gifts and his participation in research. But he was heartbroken when he found out that it was unavailable.

His mother looked everywhere possible. On Amazon, eBay, or any other platform, it was either out of stock or too expensive. Eventually, with the help of a social worker, James wrote to LEGO.

It was a huge surprise to James that LEGO wrote back. And not just that, they surprised him with the exclusive Emerald Night Train set just before his 11th birthday.

It wasn’t easy for LEGO as well. It was a discontinued set and a collectible. They had to track it down for him. This extra mile not only made that customer happy but also established a brand perception that cares about its customers.

WPManageNinja’s customer service case study

While we were looking for customer experience stories, we talked with our Support team head, Mr. Kamrul Islam , here at the WPManageNinja office. He shared a few interesting case studies with us.

“I made a full website using your table builder plugin.”

Our support team faces and solves a lot of interesting cases every day. So, from a lot of stories, we have chosen three interesting stories to share with you in this blog. And, we are not going to be technical here at all.

So keep reading.

Story #1: Fluent Form

Let’s start with a simple one. One of our clients creates a ticket with an issue through our Fluent Support helpdesk system . 

Ticket created from customer’s end

I am a Fluent Form user. And I want to create a booking form using your form builder.

Thanks a lot for contacting us. Let us get into it and see what we can do for you. We will get back to you ASAP.

Booking system plugins are typically used for appointment booking. However, our support team needs to find a way to use our form builder plugin to accomplish this task.

But instead of saying, “This is not possible,” to our client, they get to work. Started figuring out a workaround for this. For obvious reasons, a form builder cannot provide a booking system facility, but the team finds a way to use it as a basic date booking system.

Our support team used two date-picker blocks from our Fluent Form builder and used different blocks to pick the starting and ending dates. Our team got in touch with the customer and gave him the solution.

But the customer knocked again.

Ticket continue

I am happy with the solution, but I’m facing an issue. I picked one date from the “Start from” calendar drop-down, but I can still see the previous dates are active in the “End at” drop-down. I want it disabled.

Here is a screenshot.

We can certainly help you out with this. We will get back to you shortly with a solution. We really appreciate your patience, and thanks a lot for being with us.

As our support specialist stated, they provided a solid solution. They had to write some custom code to implement a new feature in the client’s system.

That customer not only gave us a 5-star rating for our service but also became one of our loyal customers.

Story #2: Ninja Table and Fluent Form:

Speaking of adding custom features, it’s one of the regular jobs for our support team. Support agents, from time to time, write custom codes to fulfill customer requests.

Once, we got another ticket about a dynamic integration between two of our products. And the request came in multiple layers.

Hi, I am ruining a multi-user-based site, and recently I purchased the Ninja table for my site. I bought this to list my users information in a single table. But after a few tries, I failed to do it. Can you help me?

Thanks a lot for connecting us. We can help you with your issue. We will get back to you ASAP with a solution. Thanks a lot for being with us.

Our support agent needed to create a table from the site’s SQL data that contained user information.

It was an easy fix. Ninja Table has that feature built-in. Our expert agent wrote a few lines of script to pull users’ information. It created a table from SQL data.

The tickets continue.

Now I can see all the users’ information in a single table. But now I want to display only logged-in user information in the table. The rest of the user’s information should be hidden for that user.

Sure, we can do that for you.

So, the support agent created a custom shortcode to embed the table on the display page. That custom shortcode restricted other users’ information to the logged-in user.  

But the client came to our support team again.

Hi, I’m very happy with the output. But now I need one more thing from you. I need another column in the table with a form link in it. If a customer clicks on it, it will open a new page with the form on it. And I need it to be prefilled with the information from the table. I don’t want my customer to fill out the form again.

We can certainly help you with this. Our engineers will get into it and get back to you soon with a solution.

Our support team has two challenges in solving this ticket.

• A table created using SQL data has a limitation. You cannot add a new column to the table without touching the SQL data. Altering SQL data is not a good idea at all. So, adding a new column in the table with a form link is difficult.
• Pull the data from the table to prefill a form with logged-in users data. And then make the prefilled input box uneditable.

Our team starts with the first challenge. We cannot create a new column without altering the SQL data. But then they figured out a way to replace particular data with the desired data. And in this case, the desired data is the form page link.

So, they used a column from the SQL data set that did not have important information. Using the custom scripting, they replaced the SQL-pushed data with the form page link. Part one is solved.

For the second challenge, our team used Fluent Form. They integrate the Fluent form with the Ninja table. With the help of some custom scripting, they were able to pull the data from the table into the form’s input box.

The client was really happy with the outcome. Just because of this service, the client bought all of our products. And there is no need to mention that the client became one of our advocates.

Story #3: Ninja Table

Customers can show you totally different use cases for your product. This particular story is the best example of this statement.

Hi, I am using your Ninja Table plugin on my site. I need to link a Google Sheet with the plugin. Is it possible?

Thanks a lot for connecting us. We have a built-in integration facility for Google Sheets in the table settings.

At this point, the WP Manage Ninja team sent a step-by-step video tutorial to show how to do the integration. and the client was happy with this.

But shortly after that, clients connected with our support team again with multiple queries.

I need your help to customize the table. I want to make it look different from a regular table. Specifically, I want to hide the header and border and resize the columns and rows. I also want to know if I can apply custom styling to the data from the Google Sheet and if an image inserted in the Google Sheet will appear in the table. So somehow, I don’t want it to look like a table.

Thanks again for connecting with us. All of your requests are possible. However, it would be helpful if we could have access to the site table on your site. This would allow us to provide you with a better suggestion.

The client shared a link to the site with the support team. The whole team was a bit confused.

Hi again. Thanks a lot for sharing the site link with us. But we may need a little more information about the site. And please specify where you want to put the final table. Also, can you please give us a link to the actual table?

I gave you the link to the table.

We are very sorry; you just gave us a site link. We cannot see any tables here.

That is the table.

May you please elaborate? What do you mean by that?

I made a full website using your table builder plugin.

After some inspection of the site, our agent realized our client had made a fully functional website using our table builder plugin. We were just amazed by this type of use case.

The client also linked the table with a Google Sheet, which we helped them with previously. This means that they do not need to log in to the WordPress dashboard to change any data.

The client can simply make changes to the Google Sheet from their phone, and our table plugin will automatically update the data on the site.  

This is so far one of the most unique and clever use cases we have seen for any of our products.

Takeaways customer service case studies

Up until now, we have shared six different customer service case studies. But these are not just stories. These case studies tell us what excellent service is. It teaches us how we can go the extra mile and how it can impact our customers.

Essential qualities of the best customer service reps

So, here are a few takeaways from these case studies:

• Be responsive. Respond to the customer, even if it’s a tweet. Be quick and efficient.
• Be helpful. Go above and beyond to help customers. This could mean tracking down a discontinued product, giving a refund, or even just sending a handwritten note. Personalization matters in customer relations. A good gesture could be to send customers gratitude notes that have been carefully crafted to suit their tastes. You can design cards , for instance, which gives you ample room for creativity and personal touch. Even when they don’t know it’s not required. This could mean offering advice, making recommendations, or just listening.
• Be transparent. Be honest with customers, even when it’s not good news. Customers always appreciate a direct response, even when they are angry.
• Be personal. Take the time to get to know the customer’s individual needs. This will help you provide more personalized service. Which will make them feel special.
• Be human. Don’t hold your personality back; let your human side shine through. Show that you care about the customer and their experience. This could mean using humor, being empathetic, or just being yourself. The personal level of connection is effortless. This will make your service seamless.
• Go the extra mile. Go above and beyond to help customers. This could mean tracking down a discontinued product, giving a refund, or even just sending a handwritten note. Whether you need to write custom code, provide training, or even just be a sounding board, let it be.
• Be creative. If you can’t find a solution, that’s fine. Go out of the box and come up with a new one.
• Be patient. Sometimes, it takes time to find the right solution that works. Be patient with customers and stay with them until they’re happy with it.
• Be open-minded. Customers may use your product in ways that you never intended. Be open to new ideas.
• Be impressed. Be amazed by the imagination and creativity of your clients. When you see customers using your product in a unique way, make sure to let them know how impressed you are.

Final thoughts

Being a tech support specialist or service agent is a challenging job, no doubt. A customer can come up with any type of issue. Hance, the service providers have to be sound enough to deal with any surprises.

The service-dependent industries are constantly facing a variety of cases every day. That’s why customer service case studies are a must-read for support and service providers. And, on the other hand, these stories can bring in new customers.

Start off with a powerful ticketing system that delivers smooth collaboration right out of the box.

Md. Ariful Basher

Hi, this is Abir, a product marketing strategist, passionate product designer, and WordPress core contributor. Creating interesting content and products that ensure a 360-degree customer experience is my daily job.

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Customer Experience

5 Case Studies to Improve Your Customer Service

As more and more customer transactions occur virtually, the quality of online help desks and customer service support is becoming an essential differentiator for companies. An estimated  73% of consumers say a good experience is critical in influencing their brand loyalties.

Customer satisfaction directly impacts the bottom line, too, as 84% of companies that work to improve their customer experience report an increase in their revenue.

Apart from the stats, it is important to look for examples of company success stories improving customer service and productivity. Having high-performance customer service is essential for any company, regardless of industry. Check out these five case studies that will help you improve this process in your business.

How Quick Heal optimized their customer service, extending support hours and responding to inquiries faster

Quick Heal Technologies is a leading provider of internet security tools and anti-virus software, serving millions of users worldwide. Like many fast-growing companies, they experienced bottlenecks in their customer service process due to the high volume of requests.

• No system to track requests from different sources. 
• Agents could not maintain a global view of the customer request, negatively impacting customer service.  
• High incidence of lost tickets and incomplete information.
• Customers were not happy with the support delays.  
• The existing system did not manage its workflow.

Quick Heal researched several options yet didn’t find a solution with the right blend of factors. That’s when the team signed up for a free trial of Kayako. Before the free trial even ended, Quick Heal decided that Kayako was the right solution.

Kayako’s Shared Inbox Solution creates a frictionless experience by unifying interactions from different sources like email, Facebook, Twitter, and live chat. The Shared Inbox Solution means QuickHeal agents can serve customers more efficiently while preventing dropped tickets and lost conversations.

Kayako Benefits for Quick Heal:

• Reduced ticket response and resolution times
• Improved collaboration and reduced duplication of effort
• Extended support hours
• Consolidated conversations from multiple sources

“Without Kayako, we would not be able to manage all of the incoming ticket requests in an organized manner nor provide the quality of support we stand for. Kayako is far more efficient than our previous help desk system.” Sushant Dashputre, Assistant Manager of Technical Support at Quick Heal

Are you ready to deliver Friction-Free Customer Service? Capture your customer’s entire journey in a way a support ticket or traditional help desk never could. Discover Kayako Single View

Increasing NameCheap’s agent productivity through a self-service knowledge base

Namecheap is a leading domain registrar and technology company that offers domain registration, hosting packages, and related services. Customer support is vital to Namecheap, especially because they serve many repeat customers. Scaling personalization in support is imperative to avoid customer churn.

• No optimized workflow for the high volume of requests led to customer complaints.
• Due to a complicated and overwhelming process when responding to customer tickets, Agents became stressed. 
• Low productivity for service agents.

Namecheap began to look for a reliable, unified customer service software solution. They had difficulty finding an option that fit all their needs. The Namecheap team then learned about Kayako and decided to try it.

After Namecheap integrated Kayako into their website, they saw an immediate improvement in agent productivity. They implemented a Self-Service Portal with tools like macro-libraries of responses, automated replies, and a self-help knowledge base to help customers get helpful answers anytime they need help.

Kayako’s SingleView gives agents a complete visualization of the entire customer journey, from initial purchase to most recent customer service inquiry for individualized customer questions needing personalized support. Kayako enables Namecheap to scale personalized customer service, the holy grail for companies with a high volume of repeat customers.

Kayako Benefits for Namecheap:

• Improved self-service knowledge base.
• Streamlined ticket management.
• Boosted productivity.
• Increased customer satisfaction.

“One of the things we most value about Kayako is how carefully they have thought about real-life support processes. In all aspects, Kayako provides us with value in buckets.” Nata Trusova, Director of Customer Support at Namecheap

How Envato manages multiple customer bases in one place and resolves tickets faster

Envato is a world-leading online community for creatives. The company’s steady growth since 2006 outpaced its existing resources for support requests. Envato tried building their own help desk and quickly saw that a DIY solution would be prohibitively expensive in terms of time and money.

They began to search for an existing customer service software solution that could meet their needs and fit their budget.

• Existing support system not keeping up with the volume of requests. 
• Support requests were hard to track, sometimes going to individual emails. 
• Envato managed multiple customer databases and needed a way to coordinate them.

Using Kayako’s SingleView dashboard, Envato could access multiple customer databases in just one place. SingleView provides a complete view of the customer journey so that customer service agents can provide personalized support to every customer.

Using features like Kayako’s ticket parsing rules, Smart Routing and internal collaboration tools helps Envato efficiently give customers accurate answers every time. With Kayako, the Envato team handles more requests in less time while increasing the quality of customer service. Best of all, Kayako is a scalable solution that can grow with Envato.

Kayako Benefits for Envato:

• Resolved tickets faster.
• Managed all customer databases in a single system.

“Kayako has allowed us to extensively customize our help desk. This really meant that we can just make our help desk work in the way we want, rather than coming up with an elaborate system to fit into the technical requirements of other help desks. It has functionality that other support providers have not been able to match.” Jordan McNamara, Community Manager, Envato

Increasing Texas Tech´s customer satisfaction with a communication and collaboration platform

Texas Tech University is a top institution focused on advancing higher education, research, and health care. With more than 10,000 employees and over 36,000 students, their support team was overwhelmed with the volume of service requests.

• Support staff, students, faculty, and many other stakeholders were frustrated because the system couldn’t handle the high volume of support requests. 
• The situation reflected poorly on their brand as a top higher education institution. 
• Staff was trying to manage support requests using a shared Outlook account.
• They had no way to collaborate internally on support requests.

After comparing different options, Texas Tech chose Kayako because it offered  Kayako Collaborators Feature they needed to coordinate internal communications and to serve customers with faster responses.

Their team quickly implemented Kayako’s out-of-the-box features and immediately saw improvement.

“Once we implemented Kayako, we immediately noticed an increase in the quality of communication and collaboration, especially between our support and development team. Our customers also praised the improved communication.” Kevin Eyck, Enterprise Server Administrator, Texas Tech University

Kayako’s integrated self-service feature helped Texas Tech reduce the number of live-agent.

tickets by assisting customers in helping themselves. Texas Tech also leveraged Kayako’s customization options, using a custom LoginShare and integrating it with the intranet and applications used on their campus.

Kayako didn’t just help Texas Tech improve the support experience for the customer; it also enhanced their internal team’s productivity.

With Kayako, Texas Tech University handles all of its support requests quickly and easily resolves customer problems. Customers also benefit from the improved processes for ticket management and communication.

Kayako Benefits for Texas Tech University:

• Reduced the number of support tickets.
• Improved internal collaboration.
• Gained self-service capability.

How Kayako helped CoinStop reduce average response time and implement omnichannel customer support

Coinstop is a trusted provider of cold storage cryptocurrency hardware wallets. After launching in 2016, Coinstop experienced extremely rapid growth.

They soon struggled to manage and respond to all of the support inquiries and questions from potential customers. The Coinstop team began searching for a customer service software solution that was easy to use and implement.

• Rapid growth was putting a strain on the existing bare-bones support process.
• Coinstop must spend time educating customers as well as selling to them.
• Customer service practices did not scale with the company.
• Coinstop was providing customer support using a single email account. 
• Manually responding to hundreds of emails per day wasn’t a productive use of time. 
• There was no way to track the progress of support requests, they couldn’t standardize responses across the various agents, and they found themselves asking repetitive questions that frustrated their customers. 

Coinstop needed a help desk and live chat software to organize and optimize their support. They chose Kayako customer support software because it offers the best experience for both support agents and customers.

Using the Kayako dashboard, agents can interact with customers across multiple social platforms, email, and live chat. Agents can see the customer’s history from all channels, not just chat or email.

Everyone on the Coinstop team has immediate access to all the information they need to provide quick, personalized support to customers with Kayako’s SingleView.

Kayako Benefits for Coinstop:

• Reduced average response time.
• Managed a higher volume of tickets with the same number of agents.
• Improved collaboration between departments.
• Implemented omnichannel support.

“You need one place to browse every single conversation you have had with each customer. Kayako is very well organized. You can tie everything into it, including emails, social media, and team members.” Christopher Pavlesic, Co-Founder of Coinstop

Are you ready to increase your team’s efficiency? Provide a better employee experience and speed up internal support with Kayako HelpDesk. Discover Kayako Self Service

Common Challenges, Custom Solutions for Customer Service Help Desk

As you can see, companies across a spectrum of industries often share similar challenges with customer service. Do you have questions about improving your customer service process? Join world-class customer support teams like the companies in these case studies using Kayako to deliver exceptional customer experiences. Book a Demo today.

What you should do now

• Start your free trial or take the tour to learn more about Kayako
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4 Customer Service Case Studies to Inspire You

Customer service case studies help attract new customers to your business by showing them how your company can help them. Instead of simply telling customers what you can do for them, you demonstrate it with storytelling and draw them in.

Last updated: November 24, 2022

6 mins read

If you’ve researched any brand it’s more than likely you’ve come across a customer service case study. Real-life customer experiences are a powerful way to advertise a brand and showcase the real interactions customers have when approaching a company’s customer service department.

Instead of simply telling a customer what it’s like to benefit from a company’s customer service, they demonstrate genuine examples of customers who have submitted tickets to their customer service team. 

On the surface of it, one company can appear much like another without powerful customer service case studies to demonstrate its impact. Customers will be required to actually sign up to your service before they can experience your customer support for themselves. 

What is a customer service case study?

A customer service case study is a strategy to show the experiences of customers that have actually signed up to use your product or service and have actually witnessed your customer service for themselves. 

Potential customers who are researching what your company has to offer will benefit from the case studies of customers that have already passed through the buying decision. Instead of a company simply telling prospective customers what they have to offer, they will be able to demonstrate their service in reality. 

A customer service case study goes beyond being a simple testimonial, however. It’s factual evidence of customers who have implemented your company’s product or service and a demonstration of its ability to actually deliver results. 

Why are customer service case studies important? 

Without customer service case studies, your business will struggle to show how it is helping its customers. A case study shows your prospective customers how the business has performed in a real-life example of customer service, and helps them imagine what it would be like to do business with your company. 

Customer service case studies show potential customers how your business has helped customers to solve their problems and further their business goals. Although there are other ways to market your business, customer service case studies are a solid way to reach out to new prospects and convert them into customers. 

Successful customer case studies showcase successful examples of customer service that persuade your prospects to actually buy. They show prospects how well your customer service actually works and highlights your product’s value. 

How do you write a customer service case study?

There are a few strategies you need to follow when writing a customer service case study. Having a variety of different case studies will enable you to reach more potential customers which cover a range of situations and needs. 

1. Focus on your personas

You need to consider the type of the customer that you want to attract with your customer service case study. Mapping out your personas is an important part of your marketing strategy because it helps you identify prospects with unique wants and needs. Your customer service may appeal to different types of individuals and it’s crucial to target each one specifically. 

2. Tell a story

At their core, customer service case studies are stories about particular customers. Simply raving about how great your company is wil be boring for your readers, and you need to take them on a journey. Stories need to have obstacles to overcome, and your case study should show how your product or service is the hero of the narrative. 

3. Emphasize benefits

The benefits of your customer service will help to appeal to customers that have a specific pain point to solve. Instead of focusing on products or features it’s important to show how your service will help them. Your customer service case study is likely to be a representative example of a customer that has similar problems to other prospects, and it’s important to help prospective customers visualize using your service. 

4. Highlight the results 

Highlighting the results that your customer service will help your customers achieve means focusing on the before and after of using your service. Genuine improvements to your customer’s business will help to convince them that your product or service is the answer. Showing the results of your customer service helps customers see how they can save or make more money after choosing your business. 

4 interesting customer service case studies

Quick heal and kayako.

Here’s the first interesting customer service case study from Kayako. There was a company called Quick Heal Technologies which was a provider of internet security tools and anti-virus software. They had millions of global users, but they were struggling to deliver outstanding customer service due to a high volume of customer service requests. 

One of their main issues was the absence of a system to track requests from different sources. Agents were checking many different platforms for customer service requests, and lacked a vital overview of the customer experience. They were losing tickets and suffering from incomplete information. There were delays in the customer support experience and the existing system couldn’t manage its workflow. 

Enter Kayako, help desk software. Their Shared Inbox Solution brought together the different customer service platforms such as email, Facebook, Twitter, and live chat. Quick Heal agents were able to support customers seamlessly and minimize the number of tickets that were dropped. They could significantly reduce their ticket response times and accelerate the time to resolution. Agents were able to much more effectively collaborate and reduce duplication of effort. 

Springboard and Help Scout

The next customer service case study is about Springboard, a platform which provides online resources and personalized mentors to help students build their dream careers. Their aim is to make a great education accessible to anyone in the world. 

So far, they have worked with 250 mentors to train more than 5,000 students over 6 continents. Their success has depended on their ability to create an open environment where students feel comfortable requesting feedback and discovering course information on their own. 

Springboard needed a solution that could help them build relationships with their students, even if it’s over email, and they decided that Help Scout was the answer. They chose Help Scout because it means they can have human conversations rather than treating their students like a ticket number. 

They make use of Help Scout’s help desk features to find key insights into students’ conversations, as well as their Docs knowledge base which provides answers to common questions. As a result, students are able to more effectively learn and overcome problems when they arise. 

We’ve got another customer service case study from an airline – in this case, JetBlue. They really know how to make their customers smile with small gestures and ensure they can win customers for life. 

One customer called Paul Brown was flying with JetBlue from the smaller terminal at Boston’s Logan airport. He realized that he couldn’t grab his usual Starbucks coffee because there was no Starbucks at the terminal. On a whim, he sent a tweet to JetBlue asking them to deliver his venti mocha, and to his surprise they obliged! Within minutes JetBlue customer service representatives had delivered the coffee to Paul’s seat on the plane. 

This example of customer service shows that JetBlue is willing to go the extra mile for customers and will ensure that the company can continue to attract more customers.

Gympass and Slack

Gympass is an international platform that gives companies and their employees 50% to 70% off a global network of fitness studios, digital workouts, and mental health and nutrition services. It was founded in 2012 and has experienced steady growth, now worth more than USD $1 billion. Users of Gympass have access to 50,000 gyms and studios in more than 7,000 cities, so they can work out while they are on the move. 

The problem with this growing company was communication across the globe. The company was overly reliant on emails which led to silos and employees missing out on vital information. The solution to this problem was Slack, a communications platform which is made accessible to all new employees so they have everything they need right from the start. 

Now, teams at Gympass work across a range of 2,000 Slack channels which are open to 1,000 employees. They can share documents, messages and information, keeping connected across locations and facilitating new projects like event planning. It’s enabled Gympass to build a strong culture of collaboration and ensure that every employee can find the information they need. 

Wrapping up

Customer service case studies help attract new customers to your business by showing them how your company can help them. Instead of simply telling customers what you can do for them, you demonstrate it with storytelling and draw them in. Showing your customers benefits and outcomes support them to make the decision to purchase. 

Before they actually have a trial of using your product or service, it’s hard for customers to know what it would be like. Case studies can give a valuable preview into what it would be like to work with your company and highlight customers that have already achieved success. 

Catherine is a content writer and community builder for creative and ethical companies. She often writes case studies, help documentation and articles about customer support. Her writing has helped businesses to attract curious audiences and transform them into loyal advocates. You can find more of her work at https://awaywithwords.co.

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ORIGINAL RESEARCH article

Service quality and customer satisfaction in the post pandemic world: a study of saudi auto care industry.

• 1 College of Business Administration, Prince Mohammad Bin Fahd University, Khobar, Saudi Arabia
• 2 Department of Management Sciences, University of Baluchistan, Quetta, Pakistan

The aim of this research is to examine the impact of service quality on customer satisfaction in the post pandemic world in auto care industry. The car care vendor in the study made effective use of social media to provide responsive updates to the customers in the post pandemic world; such use of social media provides bases for service quality and customer satisfaction. The study examined the relationship between service quality and customer satisfaction using the SERVQUAL framework. According to the findings, empathy, reliability, assurance, responsiveness, and tangibles have a significant positive relationship with customer satisfaction. Our findings suggest that it is critical for workshops to recognize the service quality factors that contribute to customer satisfaction. Findings also suggest that empathy, assurance, reliability, responsiveness, and tangibles contribute to customer satisfaction. Auto repair industry must regularly provide personal attention, greet customers in a friendly manner, deliver cars after services, notify customers when additional repairs are required, and take the time to clarify problems to customers. Furthermore, workshops must screen and hire courteous staff who can clearly communicate the services required to customers both in-person and online and effectively communicate the risks associated with repairs. Service quality seems to be aided by prompt services.

Introduction

The previous studies on the effect of pandemic have focused on the behavior related to preventative measures to protect the health of the customers; however, less attention has been paid to the influence of pandemic on customer outcomes. To fill this gap, the SERVQUAL framework was employed to examine the changes in customers’ social media behaviors that have occurred since the pandemic was declared ( Mason et al., 2021 ). In the post pandemic world, the parameters for customer satisfaction have changed considerably ( Monmousseau et al., 2020 ; Srivastava and Kumar, 2021 ; Wu et al., 2021 ). Pandemic has made personal interaction more challenging ( Brown, 2020 ). To be less vulnerable to becoming severely ill with the virus, customers prefer touchless digital mediums of communications. For example, Mason et al. (2021) concluded that pandemic has altered customers’ needs, shopping and purchasing behaviors, and post purchase satisfaction levels. Keeping in view the public healthcare concerns, the governmental pandemic mitigation policies also promotes touchless mediums for shopping; therefore, the role of social media as a communication tool stands to increase at a time when social distancing is a common practice; social media provides avenues for buyers to interact with sellers without physical contact. Thus, the use of social media gains critical importance, especially after the pandemic ( Mason et al., 2021 ), and the businesses may find new opportunities to gain competitive advantage through their use of effective social media strategies.

The car care industry uses traditional means of customer communications. The company in this study made use of social media in improving their service quality through effective and safe communication with their customers. The use of social media to provide updates to customers played a significant role in improving service quality and satisfaction ( Ramanathan et al., 2017 ). The company in the study used Snapchat to provide updates on the work, thus minimizing the customers’ need to physically visit the car care facility. This use of social media gave a significant boost to the responsiveness aspect of the service quality.

Service quality and customer satisfaction are important aspects of business since a company’s growth is largely dependent on how well it maintains its customers through service and how well they keep their customers satisfied ( Edward and Sahadev, 2011 ). According to Chang et al. (2017) ; customer satisfaction is expected to result from good service efficiency, which will improve customer engagement and interrelationship. González et al. (2007) asserted that customer satisfaction is linked to high service quality, which makes businesses more competitive in the marketplace. This study uses the SERVQUAL framework to define service quality. This framework uses five dimensions to account for service quality, namely, tangibles, reliability, responsiveness, assurance, and empathy. Identifying issues in service and customer satisfaction can lead to high service quality. Furthermore, service quality can be characterized by analyzing the variations between planned and perceived service. Service quality and customer satisfaction have a positive relationship.

Recognizing and meeting customer expectations through high levels of service quality help distinguish the company’s services from those of its rivals ( Dominic et al., 2010 ). Social media plays a critical role in shaping these service quality-related variables. Specifically, in the context coronavirus disease 2019 (COVID-19), where customers hesitated to visit auto workshops physically, the importance of online platforms such as auto workshops’ social media pages on Instagram and Facebook has increased, where customers try to get information and book appointment. For example, responsiveness is not only physical responsiveness but also digital means of communication. The car care company in this study uses social media as mode of communication with their customers due to physical interaction restriction caused by the pandemic.

Service quality becomes a critical element of success in car care industry because customer contact is one of the most important business processes ( Lambert, 2010 ). Saudi Arabia is one of the Middle East’s largest new vehicle sales and auto part markets. Saudi Arabia’s car repair industry has grown to be a significant market for automakers from all over the world. As a result, the aim of this research was to see how service quality affects customer satisfaction in the Saudi auto repair industry.

This aim of this research was to answer the following research questions:

(i) What is the contribution of individual dimensions of SERVQUAL on customer perceived service quality of car care industry in Saudi Arabia?

(ii) What is the impact of perceived service quality on customer satisfaction in car care industry in Saudi Arabia?

Literature Review

The concept of service has been defined since the 1980s by Churchill and Surprenant (1982) together with Asubonteng et al. (1996) , who popularized the customer satisfaction theory through measuring the firm’s actual service delivery in conformity with the expectations of customers, as defined by the attainment of perceived quality, and that is meeting the customers’ wants and needs beyond their aspirations. With this premise, Armstrong et al. (1997) later expanded the concept of service into the five dimensions of service quality that comprised tangibles, reliability, responsiveness, assurance, and empathy.

Extant literature on service delivery focuses on the traditional emphasis on the contact between the customer and service provider ( Mechinda and Patterson, 2011 ; Han et al., 2021 ). Doucet (2004) explained that the quality in these traditional settings depends on the design of the location and the behavior of the service provider. More recently, the proliferation of the internet has led to the emergence of the online service centers. In these cases, communication both in-person and online plays a critical role in the quality of service rendered. It follows that service quality in hybrid settings depends on quality of communications on social media as well as the behavioral interactions between the customer and the service provider ( Doucet, 2004 ; Palese and Usai, 2018 ). These factors require subjective assessments by the concerned parties, which means that different persons will have varied assessments of the quality of service received.

SERVQUAL Dimensions

Service quality has been described with the help of five quality dimensions, namely, tangibles, reliability, responsiveness, assurance, and empathy. Definitions relating to these variables have been modified by different authors. The relationship between various dimensions of service quality differs based on particular services.

The tangible aspects of a service have a significant influence on perception of service quality. These comprise the external aspects of a service that influence external customer satisfaction. The key aspects of tangibility include price, ranking relative to competitors, marketing communication and actualization, and word-of-mouth effects ( Ismagilova et al., 2019 ), which enhance the perception of service quality of customers ( Santos, 2002 ). These aspects extend beyond SERVQUAL’s definition of quality within the car care industry settings. Thus, we proposed the following hypothesis:

Hypotheses 1a: Tangibles are positively related with perceived service quality.

Reliability

Reliability is attributed to accountability and quality. There are a bunch of precursors that likewise aid basic methodology for shaping clients’ perspectives toward administration quality and reliability in the car care industry in Saudi ( Korda and Snoj, 2010 ; Omar et al., 2015 ). A portion of these predecessors is identified with car repair benefits and includes the convenient accessibility of assets, specialist’s expertise level and productive issue determination, correspondence quality, client care quality, an exhibition of information, client esteem, proficiency of staff, representatives’ capacity to tune in to client inquiries and respond emphatically to their necessities and protests, security, workers’ dependability, more limited holding up time and quickness, actual prompts, cost of administration, accessibility of issue recuperation frameworks, responsibility, guarantees, for example, mistake-free administrations, generally association’s picture and workers’ politeness, and responsiveness. Despite the innovative changes happening in the car care industry and the instructive degree of car administrations suppliers in Saudi Arabia, car care suppliers in the territory are taught about the need to continually refresh their insight into the advancements in the area of vehicle workshops and the components of administration. Thus, we argued that reliability is important to enhance the perception of service quality of customers.

Hypotheses 1b: Reliability is positively linked with perceived service quality.

Responsiveness

Responsiveness refers to the institution’s ability to provide fast and good quality service in the period. It requires minimizing the waiting duration for all interactions between the customer and the service provider ( Nambisan et al., 2016 ). Nambisan et al. (2016) explained that responsiveness is crucial for enhancing the customers’ perception of service quality. Rather, the institution should provide a fast and professional response as to the failure and recommend alternative actions to address the customer’s needs ( Lee et al., 2000 ). In this light, Nambisan summarizes responsiveness to mean four key actions, i.e., giving individual attention to customers, providing prompt service, active willingness to help guests, and employee availability when required. These aspects help companies to enhance the customers’ perception of service quality. Therefore, we proposed the following hypothesis:

Hypotheses 1c: Responsiveness is positively linked with perceived service quality.

Assurance refers to the skills and competencies used in delivering services to the customers. Wu et al. (2015) explains that employee skills and competencies help to inspire trust and confidence in the customer, which in turn stirs feelings of safety and comfort in the process of service delivery. Customers are more likely to make return visits if they feel confident of the employees’ ability to discharge their tasks. Elmadağ et al. (2008) lists the factors that inspire empathy as competence, politeness, positive attitude, and effective communication as the most important factors in assuring customers. Besides, other factors include operational security of the premises as well as the proven quality of the service provided to the customers. Thus, the assurance has significant contribution in the perception of service quality.

Hypotheses 1d: Assurance is positively related with perceived service quality.

Empathy refers to the quality of individualized attention given to the customers. The service providers go an extra mile to make the customer feel special and valued during the interaction ( Bahadur et al., 2018 ). Murray et al. (2019) explains that empathy requires visualizing the needs of the customer by assuming their position. Murray et al. (2019) lists the qualities that foster empathy as including courtesy and friendliness of staff, understanding the specific needs of the client, giving the client special attention, and taking time to explain the practices and procedure to be undertaken in the service delivery process. Therefore, we proposed the following hypothesis:

Hypotheses 1e: Empathy is positively related with perceived service quality.

Perceived Service Quality and Customer Satisfaction

Customer satisfaction refers to the level of fulfillment expressed by the customer after the service delivery process. This is a subjective assessment of the service based on the five dimensions of service quality. Customer satisfaction is important due to its direct impact on customer retention ( Hansemark and Albinsson, 2004 ; Cao et al., 2018 ; Zhou et al., 2019 ), level of spending ( Fornell et al., 2010 ), and long-term competitiveness of the organization ( Suchánek and Králová, 2019 ). Susskind et al. (2003) describes that service quality has a direct impact on customer satisfaction. For this reason, this research considers that five dimensions of service quality are the important antecedents of customer satisfaction.

Service quality refers to the ability of the service to address the needs of the customers ( Atef, 2011 ). Customers have their own perception of quality before interacting with the organization. The expectancy-confirmation paradigm holds that customers compare their perception with the actual experience to determine their level of satisfaction from the interaction ( Teas, 1993 ). These assessments are based on the five independent factors that influence quality. Consequently, this research considers service quality as an independent variable.

This study attempts to quantify perceived service quality though SERVQUAL dimensions. We proposed that customers place a high premium on service quality as a critical determinant of satisfaction. Moreover, it is argued that satisfaction prompts joy and reliability among customers in Saudi Arabia. These discoveries infer that the perception of service quality is significantly related to satisfaction, and quality insight can be applied across different cultures with negligible contrasts in the result. Car care industry in Saudi Arabia has grave quality problems. To rectify this situation, it is essential to apply quality systems as tools for development. The SERVQUAL is one of these system options. It is used to gauge the service quality using five dimensions that have been time-tested since 1982. Thus, the significance of SERVQUAL in car care industry in Saudi Arabia cannot be overemphasized. The study further suggests that the SERVRQUAL dimension increases the perceived service quality, which in turn increases customer satisfaction. Thus, we proposed the following hypothesis:

Hypothesis 2: The perceived service quality of car care customers is positively linked with their satisfaction.

Methods and Procedures

In this study, we employed a cross-sectional research design. Using a paper-pencil survey, data were collected form auto care workshops situated in the Eastern Province of Saudi Arabia. According to the study by Newsted et al. (1998) , the survey method is valuable for assessing opinions and trends by collecting quantitative data. We adapted survey instruments from previous studies. The final survey was presented to a focus group of two Ph.D. marketing scholars who specialized in survey design marketing research. The survey was modified keeping in view the recommendations suggested by focus group members. We contacted the customers who used social media to check the updates and book the appointment for their vehicle’s service and maintenance. We abstained 130 surveys, 13 of which were excluded due to missing information. Therefore, the final sample encompassed 117 (26 female and 91 male) participants across multiple age groups: 10 aged less than 25 years, 46 aged between 26 and 30 years, 28 aged between 31 and 35 years, 21 aged between 36 and 40 years, and 12 aged older than 40 years (for details, refer to Table 1 ). Similarly, the averaged participants were graduates with more than 3 years of auto care service experience.

Table 1. Demographic information.

We measured service quality dimensions using 20 indicators. Customer satisfaction of the restaurant customers was assessed using 4-item scale (for detail, refer to Table 2 ). In this research, the 5-point Likert scale from 1 = strongly disagree to 5 = strongly agree was used.

Table 2. Constructs and items included in the questionnaire.

Control Variables

Following the previous research, customer’s gender and age were controlled to examine the influence of service quality dimensions on customer satisfaction.

Data Analysis and Results

For data analysis and hypotheses testing, we employed the structural equation modeling (SEM) based on the partial least squares (PLS) in Smart-PLS. Smart-PLS 3 is a powerful tool, which is used for the confirmatory factor analysis (CFA) and SEM ( Nachtigall et al., 2003 ). Research suggests that CFA is the best approach to examine the reliability and validity of the constructs. We employed SEM for hypotheses testing because it is a multivariate data analysis technique, which is commonly used in the social sciences ( González et al., 2008 ).

Common Method Bias

To ensure that common method bias (CMB) is not a serious concern for our results, we employed procedural and statistical and procedural remedies. During data collection, each survey in the research contained a covering letter explaining the purpose of the study and guaranteed the full anonymity of the participants. Moreover, it was mentioned in the cover letter that there was no right and wrong questions, and respondents’ answers would neither be related to their personalities nor disclosed to anyone. According to Podsakoff et al. (2003) , the confidentiality of the responses can assist to minimize the possibility of CMB. Furthermore, CMB was verified through the Harman’s single-factor test ( Podsakoff et al., 2003 ). All items in this research framework were categorized into six factors, among which the first factor explained 19.01% of the variance. Thus, our results showed that CMB was not an issue in our research. Moreover, using both tolerance value and the variance inflation factors (VIFs), we assessed the level of multicollinearity among the independent variables. Our results indicate that the tolerance values for all dimensions of service quality were above the recommended threshold point of 0.10 ( Cohen et al., 2003 ), and VIF scores were between 1.4 and 1.8, which suggested the absence of multicollinearity; thus, it is not a serious issue for this study.

Measurement Model

We performed CFA to analyze the reliability and validity of the constructs. The measurement model was assessed by examining the content, convergent, and discriminant validities. To assess the content validity, we reviewed the relevant literature and pilot test the survey. We used item loadings, Cronbach’s alpha, composite reliability (CR), and the average variance extracted (AVE) ( Fornell and Larcker, 1981b ) to assess the convergent validity. The findings of CFA illustrate that all item loadings are greater than 0.70. The acceptable threshold levels for all values were met, as the value of Cronbach’s alpha and CR was greater than 0.70 for all constructs ( Fornell and Larcker, 1981b ), and the AVE for all variables was above 0.50 ( Tabachnick and Fidell, 2007 ; see Table 3 ). Thus, these findings show acceptable convergent validity.

Table 3. Item loadings, Cronbach’s alpha, composite reliability, and average variance extracted.

To analyze the discriminant validity, we evaluated the discriminant validity by matching the association between correlation among variables and the square root of the AVE of the variables ( Fornell and Larcker, 1981a ). The results demonstrate that the square roots of AVE are above the correlation among constructs, hence showing a satisfactory discriminant validity, therefore, indicating an acceptable discriminant validity. Moreover, descriptive statistics and correlations are provided in Table 4 .

Table 4. Descriptive statistics and correlations.

Structural Model and Hypotheses Testing

After establishing the acceptable reliability and validity in the measurement model, we examined the relationship among variables and analyzed the hypotheses based on the examination of standardized paths. The path significance of proposed relations were calculated using the SEM through the bootstrap resampling technique ( Henseler et al., 2009 ), with 2,000 iterations of resampling. The proposed research framework contains five dimensions of service quality (i.e., tangibles of the auto care, reliability of the auto care, responsiveness of the auto care, assurance of the auto care, and empathy of the auto care) and customer satisfaction of auto care. The results show that five dimensions of service quality are significantly related to customer’s perception of service quality of auto care; thus, hypotheses 1a, 1b, 1c, 1d, and 1e were supported. Figure 1 shows that the service quality of auto care is a significant determinant of customer satisfaction of auto care industry (β = 0.85, p < 0.001), supporting hypothesis 2. The result in Figure 1 also shows that 73.8% of the variation exists in customer satisfaction of auto care.

Figure 1. Results of the research model tests. *** p < 0.001.

The main purpose of this research was to assess the relationship between service quality and customer satisfaction in the post pandemic world in Saudi Arabia. This study was designed to examine how satisfaction of auto care customers is influenced by service quality, especially, when pandemic was declared, and due to health concerns, the customers were reluctant to visit workshops physically ( Mason et al., 2021 ). It appears that after the pandemic, customers were increasingly using online platforms for purchasing goods and services. This study reveals how customers of auto repair in Saudi perceive service quality and see how applicable SERVQUAL model across with five dimensions, including tangibles, responsiveness, reliability, assurance, and empathy measure service quality. The findings of this research show that five dimensions of SERVQUAL are positively related to the service quality perception of auto care customers in Saudi Arabia. Moreover, service quality perceptions are positively linked with customer satisfaction. These results indicate that auto care customers view service quality as an important antecedent of their satisfaction. The findings indicate that the customers perceive the service quality as a basic service expectation and will not bear the extra cost for this criterion. In this research, the positive connection between service quality and customer satisfaction is also consistent with previous studies (e.g., González et al., 2007 ; Gallarza-Granizo et al., 2020 ; Cai et al., 2021 ). Thus, service quality plays a key role in satisfying customers. These findings suggest that service organizations, like auto repair industry in Saudi Arabia could enhance satisfaction of their customers through improving service quality. Because of pandemic, people are reluctant to visit auto care workshops, and they try to book appointment through social media; so, by improving the quality of management of their social media pages, the workshops can provide accurate information for monitoring, maintaining, and improving service quality ( Sofyani et al., 2020 ). More specifically, social media, which allows individuals to interact remotely, appears to be gaining significant importance as a tool for identifying customers’ products and service needs. Increasingly, customers are also increasingly engaging with retailers through social media to search and shop for product and services options, evaluate the alternatives, and make purchases.

Furthermore, the research on the customer service quality can be held essential since it acts as a means for the promotion of the competitiveness of an organization. Precisely, the knowledge about the customers’ view concerning service quality can be used by organizations as a tool to improve their customer services. For example, knowledge of the required customer service would help in the facilitation of training programs oriented toward the enlightenment of the overall employees on the practices to improve and offer high-quality customer services. Besides, information concerning customer services would be essential in decision-making process concerning the marketing campaigns of the firm, hence generating competitive advantage of the organization in the marketplace. Findings show that customers demand more from auto repair, so the company must work hard to increase all service quality dimensions to improve customer satisfaction. Thus, organizations ought to venture in customer services initiatives to harness high-quality services.

Managerial Implications

The findings of this research indicate a strong association between SERVQUAL dimensions and perceived service quality. Perception of higher service quality leads to higher level of customer satisfaction among Saudi car care customers. In particular, the results indicate high scores for reliability, empathy, tangibles, and responsiveness. These are clear indications that the immense budgetary allocation has enabled these institutions to develop capacity. Nevertheless, the lack of a strong human resource base remains a key challenge in the car care industry. The effective use of social media plays a critical role in the responsiveness dimension of service quality. Companies need to develop their digital and social media marketing strategies in the post pandemic world to better satisfy their customers.

Saudi Arabia requires a large and well-trained human resource base. This requires intensive investment in training and development. Most of these workers have a limited contract, which reduced their focus on long-term dedication. Consequently, the government should provide longer-term contracts for workers in this critical sector. The contracts should include training on tailored courses to serve the identified needs in effective communication with the customers using digital media. We suggested that the auto car care workshops should provide training to their workers, particularly, on service technicians to enhance their skills that will help to deliver fast and reliable service to their auto customers.

Moreover, the auto car care workshops also provide customer care- or customer handling-related training especially for the service marketing personnel who handles customer directly for them to better understand the customer needs and expectations. This can be done at least once a year. This will help auto care workshops to improve their service quality.

Limitation and Future Research Direction

This research is not without limitations. First, the findings of this study are based on data collected from a single source and at a single point of time, which might be subjected to CMB ( Podsakoff et al., 2003 ). Future research can collect data from different points of time to validate the findings of this research. Second, this research was carried out with data obtained from Saudi auto car care customers; the findings of this research might be different because the research framework was retested in a different cultural context. Therefore, more research is needed to improve the understanding of the principles of service quality and customer satisfaction, as well as how they are evaluated, since these concepts are critical for service organizations’ sustainability and development. A greater sample size should be used in a similar study so that the findings could be applied to a larger population. Research on the effect of inadequate customer service on customer satisfaction, the impact of customer retention strategies on customer satisfaction levels, and the impact of regulatory policies on customer satisfaction is also recommended. Third, because most of the participants participated in this research are men, future studies should obtain data from female participants and provide more insights into the difference between male and female customers’ satisfaction levels. Moreover, due to limitation of time, the sample was collected from the eastern province. Consequently, further research should include a larger and more representative sample of the Saudi population. Because of the non-probability sampling approach used in this research, the results obtained cannot be generalized to a wide range of similar auto repair services situations, even though the methodology used in this study could be extended to these similar situations. Since the sample size considered is not that large, expectations could vary significantly. When compared with the significance of conducting this form of analysis, the limitations mentioned above are minor. Such research should be conducted on a regular basis to track service quality and customer satisfaction levels and, as a result, make appropriate changes to correct any vulnerability that may exist.

Data Availability Statement

The original contributions presented in the study are included in the article/supplementary material, further inquiries can be directed to the corresponding author.

Ethics Statement

Ethical review and approval was not required for the study on human participants in accordance with the local legislation and institutional requirements. Written informed consent for participation was not required for this study in accordance with the national legislation and the institutional requirements. The patients/participants provided their written informed consent to participate in this study.

Author Contributions

SZ helped in designing the study. ZH helped in designing and writing the manuscript. MAA helped in data collection and analysis and writing the manuscript. SUR repositioned and fine-tuned the manuscript, wrote the introduction, and provided feedback on the manuscript.

This study was received funding from University Research Fund.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

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Keywords : auto care, customer satisfaction, service quality, Saudi Arabia, pandemic (COVID-19)

Citation: Zygiaris S, Hameed Z, Ayidh Alsubaie M and Ur Rehman S (2022) Service Quality and Customer Satisfaction in the Post Pandemic World: A Study of Saudi Auto Care Industry. Front. Psychol. 13:842141. doi: 10.3389/fpsyg.2022.842141

Received: 23 December 2021; Accepted: 07 February 2022; Published: 11 March 2022.

Reviewed by:

Copyright © 2022 Zygiaris, Hameed, Ayidh Alsubaie and Ur Rehman. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) . The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Zahid Hameed, [email protected]

Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.

A study of service quality, corporate image, customer satisfaction, revisit intention and word-of-mouth: evidence from the KTV industry

PSU Research Review

ISSN : 2399-1747

Article publication date: 8 December 2020

Issue publication date: 30 August 2022

This paper aims to understand the impact of service quality on corporate image and customer satisfaction. Furthermore, this study also examined the influence of corporate image and customer satisfaction on revisit intention and word of mouth. The mediation effect of corporate image and customer satisfaction on the relationships between service quality–revisit intention and service quality–word of mouth was also examined.

Design/methodology/approach

This study used the survey questionnaire method and collected data from 253 respondents comprising of customers who had karaoke singing experience in the Karaoke television (KTV). The partial least squares structural equation modeling was used in this study.

This study found that service quality has a significant positive influence on corporate image and customer satisfaction. Corporate image does not have a significant influence on revisit intention but has a significant positive influence on word of mouth. Furthermore, customer satisfaction has a significant positive influence on revisit intention and word of mouth. The mediation effect of corporate image and customer satisfaction is also found to be significant for most of the relationships.

Originality/value

This study showed the importance of service on customers’ reactions and behaviors in the KTV context, which have not been previously investigated. Businesses should always provide superior service quality to their customers because it impacts their subsequent behaviors such as revisit intention and word of mouth.

Service quality

Customer satisfaction.

• Revisit intention
• Word of mouth

Corporate image

Khoo, K.L. (2022), "A study of service quality, corporate image, customer satisfaction, revisit intention and word-of-mouth: evidence from the KTV industry", PSU Research Review , Vol. 6 No. 2, pp. 105-119. https://doi.org/10.1108/PRR-08-2019-0029

Emerald Publishing Limited

Copyright © 2020, Kim Leng Khoo.

Published in PSU Research Review . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence maybe seen at http://creativecommons.org/licences/by/4.0/legalcode

Introduction

A karaoke house, also known as a Karaoke television (KTV), is a place where private rooms furnished with karaoke equipment are rented out to customers who want to sing in private ( Fung, 2009 ). It allows ordinary singers to enjoy singing in a private KTV room instead of singing on stage in front of the general public, which can avoid the pressure of being criticized ( Ruismäki et al. , 2013 ). Karaoke singing is a popular leisure activity in Asian countries such as Japan, Hong Kong, China, Taiwan and Malaysia. The KTV is a place not only for customers to express their feelings through singing but also for to talk about businesses.

China’s karaoke-booth market alone is currently worth about $600m and is expected to reach $1.2bn by the end of 2018 ( The Wall Street Journal, 2018 ). In Malaysia, there is no statistics on the total sales of the KTV industry but the increasing number of KTVs opening up in Malaysia shows the rising demand for karaoke consumption among Malaysians. Some of the popular Karaoke operators in Malaysia include RedBox, Loudspeaker, Neway and Superstar Family KTV ( Tan, 2016 ). Given the stiff competition in the KTV industry, KTV companies need to project good service quality to attract and retain customers ( Koay et al. , 2019 ). It is important to offer service elements that satisfy customers’ expectations and simultaneously, reflect positive companies’ identities. With satisfied customers and positive corporate image, positive word of mouth will be generated and customers are more likely to revisit the business ( Hussain, 2016 ).

However, the question remains that how existing service model of KTV operators, particularly in Malaysia, manage to attract and retain customers. Therefore, the study aims to examine the influence of service quality on corporate image and customer satisfaction and how corporate image and customer satisfaction influence revisit intention and word of mouth. Furthermore, this study also investigates the mediating role of corporate image and customer satisfaction on the relationships between service quality–revisit intention and service quality–word of mouth.

The findings will be very useful for managers whose aim is to improve the current practices of their KTV businesses.

Literature review

Equity theory.

Equity theory posits that people compare their sacrifices and rewards that they receive during an exchange process ( Adams, 1963 ). In line with this, several studies have adopted equity theory to understand the relationship between customers and companies ( Chen et al. , 2019 ; Lim, 2020 ; Pai et al. , 2018 ). These studies argue that when customers feel that they are equitably treated during an exchange with the company, they feel satisfied.

Equity theory suggests that when customers receive good quality of service, they are more likely to show commitment to the company in different forms, such as repeat patronage ( Kelley and Davis, 1994 ; Andreassen, 2000 ). Jiang et al. (2016) conducted a study in the e-commerce context and found that service quality significantly influenced customer loyalty based on equity theory. In another study of Chen et al. (2012) , equity theory is used to examine how service quality affects customer satisfaction in the banking industry. This theory provides a profound theoretical lens to understand how customers perceive KTV service quality. Customers are likely to revisit and create positive word of mouth if they believe KTV service quality satisfies them.

Providing superior service quality is crucial in achieving long-term success in the service industry ( Shahin and Dabestani, 2010 ). Service quality refers to consumers’ evaluation of the excellence and superiority of the service encountered ( Zeithaml and Bitner, 2003 ). Customers who experience positive feelings and attitudes toward the services during the service consumption process are more likely to perceive favorably toward the service provider, which subsequently leads to customer loyalty ( Ishaq, 2012 ). This is consistent with past studies which have shown that in the hotel industry, customers who are satisfied with the service quality are more likely to become loyal customers ( Cheng and Rashid, 2013 ; Cheng et al. , 2014 ). In the context of tourism, a research by Wu and Li (2015) on a sample of visitors to the Museums of Macau revealed that service quality is critical to customer satisfaction. In addition, a recent study by Kasiri et al. (2017) indicated that service industry can improve customer satisfaction through service quality.

Service quality has a significant positive influence on corporate image.

Service quality has a significant positive influence on customer satisfaction.

Corporate image is defined as “the immediate mental picture an individual holds of the organisation” ( Foroudi et al. , 2014 , p. 2271) which is formed based on a customer’s overall consumption experiences ( Aydin and Özer, 2005 ). In another words, corporate image refers to customers’ perception of the organization image. According to Virvilaite and Daubaraite (2011) , corporate image is a form of competitive advantage which is hard for competitors to imitate as it can only be developed over a long period of time. Therefore, maintaining a positive corporate image is critical because it significantly impacts customer repurchase decisions and willingness to provide word of mouth ( Andreassen and Lindestad, 1998 ).

In the context of service marketing and entertainment, corporate image was found to have a significant positive influence on behavioral intention in Taiwan’s quick service restaurant industry ( Wu, 2013 ), gaming industry ( Wu, 2014 ) and theme park industry ( Wu et al. , 2018 ). For example, Wu et al. (2015) discovered that corporate image greatly affects revisit intention in the context of the hot spring industry. Quintal and Polczynski (2010) described revisit intention as customers’ judgment about the likelihood of revisiting the same destination. In the long run, such behavioral intention will contribute to the business profitability ( Jani and Han, 2014 ). On the other hand, when the corporate image is favorable, customers are more likely to spread a positive word of mouth. Word of mouth refers to “informal, person-to-person communication between a perceived non-commercial communicator and a receiver regarding a brand, product, organization, or service” ( Harrison-Walker, 2001 , p. 70). In a study investigating a company’s green image, Wang et al. (2018) found out that corporate image affects consumers’ word of mouth about green hotels.

Corporate image is viewed as an intervening variable that acts as a mediator between service quality and behavioral intentions including loyalty, revisit intention and word of mouth. For example, Lai et al. (2009) found that higher quality of service significantly increases corporate image, which in turn increases behavioral intentions. Consistent with past studies, corporate image should have a significant positive influence on revisit intention and word of mouth in the context of the KTV industry. Considering all of this evidence, behavioral intention indicates a stated likelihood to return to the place, to provide favorable comments regarding the place and to recommend the place to others in the future ( Andreassen and Lindestad, 1998 ).

Corporate image has a significant positive influence on revisit intention.

Corporate image has a significant positive influence on word of mouth.

Corporate image mediates the relationship between service quality and revisit intention.

Corporate image mediates the relationship between service quality and word of mouth.

Customer satisfaction is a measure of how products and the services provided meet or surpass customer expectations ( Kotler and Armstrong, 2018 ). It refers to the final state of a process in which the customers evaluate the perceived benefits obtained from using service ( Oliver, 2010 ). If a company wants customers to perceive their products or services as valuable, customer satisfaction must be fulfilled ( Zameer et al. , 2015 ). Satisfied customers tend to stay loyal with products that can satisfy their needs and wants ( Mohd Suki, 2017 ).

A study conducted by Agnihotri et al. (2019) reported that customer satisfaction with the sales personnel has a significant positive influence on customers’ willingness to pay more. This shows that when customers’ needs are met efficiently, the satisfaction will drive them to spend more money and make more repeated purchase. On the other hand, Reynolds and Beatty (1999) found out that high level of satisfaction with the company results in spreading positive word of mouth about the company. Ardnt (1967 , p. 1) described word of mouth as informal conversation which is “probably the oldest mechanism by which opinions on products and brands are developed, expressed, and spread.” In another words, a satisfied customer would likely give the company a good reference ( Leung, 2020 ). For example, Han and Ryu (2012) empirically verified that customer satisfaction is positively related to word of mouth in a full service restaurant.

Customer satisfaction has a significant positive influence on revisit intention.

Customer satisfaction has a significant positive influence on word of mouth.

Customer satisfaction mediates the relationship between service quality and revisit intention.

Customer satisfaction mediates the relationship between service quality and word of mouth.

The full research model is shown in Figure 1 .

Research method

A survey questionnaire method was used in this study to achieve our research objectives. Before we distribute the survey questionnaires to our target respondents, we conducted a pre-test on several academic experts and several respondents. Their feedback was later used in amending the final questionnaire. Some wordings and the layout were corrected for better clarity. To avoid sampling bias, we distributed the survey questionnaires to 50 customers in 6 different branches. Each respondent was rewarded with a voucher worth RM10 from the KTV X to increase the response rate. In the end, the final usable samples consist of 253 customers who have experienced singing karaoke in the KTV X. The real identity of the company is concealed and represented as KTV X in this paper.

All scales were adapted from validated studies and measured in a five-point scale format. Service quality was measured using three items adapted from the study by Wu et al. (2015) which included “This KTV has offered superior quality” as an example item. Corporate image was measured using five items adapted from the study by Aydin and Özer (2005) . An example item includes “The KTV X is stable and firmly established.” Customer satisfaction was measured using three items adapted from Oliver’s (1980) study with “Overall, I am satisfied with my experience at the KTV X” incorporated as an example item. Revisit intention was measured using two items from the study by Lam et al. (2011) . An example item includes “I will visit this KTV in the future.” Word of mouth was measured using four items adapted from the study by Line et al. (2018) and the example item was “I would say positive things about this KTV to other people.”

Data analysis

Partial least squares structural equation modeling (PLS-SEM) was conducted using Smart PLS 3 software in this research ( Ringle et al. , 2015 ). Some of the strengths of PLS-SEM and the reasons for its use are: PLS-SEM is less rigid on data assumptions and more flexible with small sample size data and PLS-SEM has the ability to handle complex models ( Hair et al. , 2017 ).

The measurement model was first validated and then the structural model was estimated ( Anderson and Gerbing, 1988 ).

Common method variance

Common method variance (CMV) in this study was assessed using the unmeasured latent marker construct approach ( Liang et al. , 2007 ). The ratio of the average substantive variance (0.895) to the average method variance (0.0028) is small at 29:1. Furthermore, Table 2 shows that each of the inter-construct correlations is less than the threshold value of 0.9 ( Bagozzi et al. , 1991 ). Hence, we can conclude that CMV is not a serious concern in the present study.

Measurement model

This study first checked for the internal consistency of measures for each construct. As shown in Table 1 , the values of Cronbach’s alpha and composite reliability for all the constructs are greater than the recommended value of 0.7, indicating that all the constructs are reliable. Next, convergent validity was examined by looking at the factor loadings and average variance extracted (AVE). Table 1 shows that the factors loadings were all higher than 0.7 and the AVE values were also higher than 0.5, as suggested by Hair et al. (2017) . Thus, convergent validity was ascertained in this study. Discriminant validity was examined using the Fornell–Larcker criterion and heterotrait–monotrait (HTMT) criterion. Fornell–Larcker criterion requires the square root of the AVE for each construct to be greater than its correlations with other constructs and HTMT criterion requires the ratio to be lower than 0.9 ( Fornell and Larcker, 1981 ; Henseler et al. , 2015 ). As shown in Table 2 , this study did not have discriminant validity issue. The model fit was assessed using the standardized root mean square residual (SRMR). The SRMR value for the research model was 0.059, indicating that the data fits the model ( Henseler et al. , 2016a ).

Structural model

A bootstrapping procedure of 5,000 re-samples was conducted to assess the significance of path coefficients. Table 3 shows that service quality has a significant positive influence on corporate image and customer satisfaction, supporting H1 and H2 . Next, corporate image was found to have a significant positive influence on word of mouth but no significant influence on revisit intention, thus supporting H4 but not H3 . In addition, customer satisfaction was found to have a significant positive influence on revisit intention and word of mouth, supporting H7 and H8 . Apart from that, we also assessed the mediation effect of corporate image and customer satisfaction according to the guidelines by Nitzl et al. (2016) . Table 3 shows that H5 is not supported as corporate image does not mediate the relationship between service quality and revisit intention. However, corporate image mediates the relationship between service quality and word of mouth, supporting H6 . Furthermore, customer satisfaction mediates the relationship between service quality and revisit intention, and the relationship between service quality and word of mouth, thus supporting H9 and H10 .

To examine the explanatory power of the research model, we also reported the R 2 , Q 2 and Q 2 predict, as shown in Figure 2 . The value of Q 2 was generated using a blinding folding procedure and should exceed zero indicating that the model has predictive relevance ( Geisser, 1974 ; Stone, 1974 ). The value of Q 2 predict greater than zero indicates that using the PLS model gives more predictive power (smaller prediction errors) than simply using the average value of all observations ( Hair et al. , 2019 ).

Using gender as a moderator, a post-hoc multi-group analysis (MGA) was conducted in this research because some studies indicated that the influence of service quality on customer satisfaction and corporate image, and the influence on loyalty might be different between males and females ( Dimitriades, 2006 ; Karatepe, 2011 ). Prior to running the MGA analysis, a permutation test to establish measurement invariance was conducted ( Henseler et al. , 2016b ). Table 4 shows the results of the permutation test. The results indicate the establishment of full measurement invariance. The full MGA results show significant differences between male and female groups in regard to the influence of service quality on customer satisfaction (Henseler’s MGA p -value = 0.025) ( Table 5 ). The results can be useful for managerial implications.

Discussions

Karaoke singing is a popular activity in Asia and a lucrative business especially in Malaysia. However, competition is fierce as customers are presented with many choices of KTV providers. To outperform the competitors, satisfying the needs of customers is important to attract them to revisit and spread positive words about the company to their friends. Consistent with past studies ( Cheng et al. , 2014 ; Wu et al. , 2011 ), the findings of this study showed that service quality is an important factor that influences corporate image and customers’ satisfaction. KTV companies need to ensure that the service consumption process in their premises is enjoyable for the customers as it can influence the overall perception of service quality.

The study also showed evidence of the importance of having a positive corporate image and achieving high levels of customer satisfaction. Although corporate image was found to have no significant influence on revisit intention, it has a significant positive influence on customers’ intention to spread positive things about the KTV company. For instance, customers who perceive positively about the image of the company are more likely to say positive things, post positive things online and write a positive review online about the company. Customer satisfaction is also a strong predictor of revisit intention and word of mouth, which implies that satisfied customers are more likely to come back to the same company despite having alternative choices in the market, and to spread positive things about the KTV company. It is important to ensure customers spread positive things about the company to others because it is a form of effective marketing strategies that create awareness to the public.

However, the study showed unexpected results whereby corporate image had no significant effect on revisit intentions and did not mediate the relationship between service quality and revisit intentions. It is surmised that many KTV companies in Malaysia offer the similar service model and therefore providing superior excellent service quality becomes a necessity rather than a strategy that can elevate positive corporate image and revisit intention.

Although it has been shown that corporate image and customer satisfaction are important, their influence on revisit intention and word of mouth is less direct. Hence, KTV companies need to understand which factors influence corporate image and customer satisfaction in the first place. The finding suggested that service quality is the important element that can lead to a higher revisit intention and positive word of mouth but it is mediated by corporate image and customer satisfaction.

Managerial implications

It is important for leisure-service operators to understand what customers are looking for to develop their revisit intention and willingness to spread word of mouth. The key areas to consider when companies try to reduce unfavorable word of mouth include service quality, customer satisfaction and corporate image. According to the appraisal theory, perceived service quality leads to customers’ consumption-related emotions ( Bagozzi, 1992 ). If a customer’s consumption experience involves emotions, the customer is more likely to share his/her feeling about the experience with others ( Westbrook, 1987 ).

The results indicated that satisfied customers reported greater intentions to revisit and spreading word of mouth; thus, leisure-service companies should focus on providing excellent service and build good relationships with customers to encourage repeat business. As the internet has become ubiquitous in customers’ lives, digital networking platforms can be used to create positive company reputation. The company’s digital networking platforms represent the brand; therefore, it is important for the leisure-service providers to focus on sustaining the platforms by communicating and resolving customers’ complaints. In addition, good interactions with customers help to improve corporate image ( Wu et al. , 2015 ).

On the other hand, leisure-service companies should value their employees by promoting a healthy organizational culture. Satisfied employees can improve customer satisfaction via emotional contagion ( Hennig-Thurau et al. , 2006 ). Emotional contagion refers to the “tendency to automatically mimic and synchronize facial expressions, vocalizations, and movements with those of another person and, consequently, to converge emotionally” ( Hatfield et al. , 1994 , p. 5). As highly satisfied customers are more likely to revisit, the companies should try their best to create a positive milieu and offer better service to the customers.

Conclusion, limitations and future research directions

In conclusion, to the best of the author’s knowledge, this study is the first that explored the associations between service quality, corporate image, customer satisfaction, revisit intention and word of mouth in the KTV context. Most of the hypothesized relationships are supported, indicating service quality is an important element that affects corporate image and customer satisfaction which, in turn, influences revisit intention and word of mouth. The findings of this study give suggestions to KTV companies on how to gain new customers and retain old customers, which can lead to organizational growth.

This study is not without limitations. First, cross-sectional data is inadequate in drawing causal conclusions. Future studies should use longitudinal data if possible. Second, the results might not be generalizable to other contexts. Hence, the research model should be replicated in other contexts. Third, CMV may be an issue of concern because the measured latent marker variable (MLMV) approach was not applied ( Chin, 2013 ). Future studies should consider either collecting data from different time points or using MLMV approach to detect and control for CMV. Fourth, revisit intention and word of mouth were measured using a self-report method. It would be more interesting to track customers’ revisit frequency as a way to measure revisit intention and to assess customers’ feedback on the social media as a measurement of word of mouth.

Research model

Results of the structural model

Discriminant validity

Direct and indirect effects

Results of moderation hypothesis testing using MGA

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Key Lessons From Amazon's Customer Service Chatbot Q

I nnovations in artificial intelligence are continuously refining the quality of customer interactions. Here's how to make them work for you.

Amazon's launch of the AI chatbot Q represents a significant development in the integration of artificial intelligence in customer service. This advancement and others demonstrate AI's growing influence in enhancing customer experience and efficiency.

As AI tools become more sophisticated, they offer unparalleled opportunities for personalizing customer interactions, a crucial factor in today's competitive market. Understanding the nuances of this transformation is essential for businesses aiming to leverage AI for improved customer engagement and retention.

More businesses are using AI in customer service

Intercom's "The State of AI in Customer Service" 2023 report offers a deep dive into how global support leaders perceive and adapt to AI advancements in customer service. A striking 69 percent of leaders are planning to escalate their AI investments, seeing AI's potential to redefine customer service paradigms. Interestingly, 78 percent of these leaders believe AI will not only preserve human jobs in customer support but also create new roles, countering the common misconception of AI as a job displacer. This reflects a growing recognition of A I as a tool for augmenting human capabilities , enhancing efficiency, and fostering a more dynamic customer service environment. Moreover, 73 percent of leaders foresee AI-assisted services becoming a customer expectation within five years, indicating a shift toward more AI-integrated customer service models.

The advancements in generative AI and its impact

BCG's " How Generative AI Is Already Transforming Customer Service " report sheds light on its transformative impact on customer service. Generative AI, exemplified by tools like ChatGPT, is increasingly seen as a driver of significant productivity gains. For instance, renewable energy group Octopus Energy's implementation of AI for customer email responses led to a remarkable 18 percent increase in customer satisfaction. Yet the journey towards fully autonomous AI systems is not without its challenges. Issues such as inherent biases in training data and occasional inaccuracies necessitate a careful balance between AI autonomy and human oversight. The key lies in identifying use cases where AI can provide maximum value without compromising reliability and ethical considerations.

Amazon's AI chatbot Q: A case study

Amazon Web Services AI chatbot Q represents a groundbreaking development in customer service, showcasing Amazon's commitment to utilizing advanced technology to enhance customer interactions. Q stands as a symbol of the evolving landscape in customer service, where AI-driven solutions are becoming pivotal for businesses. Here are the key features and implications of Amazon's Q:

• Revolutionizing With Generative AI: Q integrates generative AI and large language models, providing accurate and timely responses. This technology marks a substantial improvement in automating and streamlining customer support processes.
• Transition to Proactive Service: Shifting from traditional reactive approaches, Q exemplifies a proactive strategy in customer service. It efficiently addresses the modern necessity for rapid and precise digital communication.
• Broad Accessibility and Ease of Use: Amazon's Q democratizes AI in customer service, making it accessible to many users, including those without deep technical expertise. This broadens the scope of AI's application in various business contexts.
• Cost-Effective AI Innovation: With its competitive pricing model, Q positions itself as an economical AI solution for businesses, influencing the future of investments in AI-enhanced customer service tools and setting new industry benchmarks for efficiency and customer interaction personalization.

The role of AI in personalizing customer experiences

AI's capacity for personalization is revolutionizing customer interactions. Statista reports that 73 percent of consumers see AI as positively impacting customer service, particularly in creating personalized, seamless experiences. This personalization extends beyond mere efficiency; it involves understanding customer preferences, history, and behavior to offer tailored solutions, thereby significantly enhancing customer engagement and loyalty.

Emerging techniques for enhanced AI interactions

Innovations in AI are continuously refining the quality of customer interactions. Techniques like sentiment analysis and advanced contextual understanding enable AI systems to respond more empathetically and accurately to customer inquiries. The ability of AI to adapt and learn from interaction history is crucial for delivering customized experiences. However, maintaining a balance between AI-driven efficiency and human empathy remains a significant challenge. As AI becomes more sophisticated, it must maintain the "human touch" that is essential in customer service interactions.

Undeniable impact on customer service

The case of Amazon's Q highlights the potential of AI chatbots in reshaping customer service dynamics. As Gartner management consultants point out , the cost-effectiveness of AI in customer service is remarkable, with chatbot interactions costing significantly less than human interactions. Businesses are encouraged to embrace AI innovations responsibly, ensuring they effectively balance technological advancements with the nuances of human interaction, thereby paving the way for improved customer experiences and competitive advantage.

This post originally appeared at inc.com .

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The state of AI in early 2024: Gen AI adoption spikes and starts to generate value

If 2023 was the year the world discovered generative AI (gen AI) , 2024 is the year organizations truly began using—and deriving business value from—this new technology. In the latest McKinsey Global Survey  on AI, 65 percent of respondents report that their organizations are regularly using gen AI, nearly double the percentage from our previous survey just ten months ago. Respondents’ expectations for gen AI’s impact remain as high as they were last year , with three-quarters predicting that gen AI will lead to significant or disruptive change in their industries in the years ahead.

About the authors

This article is a collaborative effort by Alex Singla , Alexander Sukharevsky , Lareina Yee , and Michael Chui , with Bryce Hall , representing views from QuantumBlack, AI by McKinsey, and McKinsey Digital.

Organizations are already seeing material benefits from gen AI use, reporting both cost decreases and revenue jumps in the business units deploying the technology. The survey also provides insights into the kinds of risks presented by gen AI—most notably, inaccuracy—as well as the emerging practices of top performers to mitigate those challenges and capture value.

AI adoption surges

Interest in generative AI has also brightened the spotlight on a broader set of AI capabilities. For the past six years, AI adoption by respondents’ organizations has hovered at about 50 percent. This year, the survey finds that adoption has jumped to 72 percent (Exhibit 1). And the interest is truly global in scope. Our 2023 survey found that AI adoption did not reach 66 percent in any region; however, this year more than two-thirds of respondents in nearly every region say their organizations are using AI. 1 Organizations based in Central and South America are the exception, with 58 percent of respondents working for organizations based in Central and South America reporting AI adoption. Looking by industry, the biggest increase in adoption can be found in professional services. 2 Includes respondents working for organizations focused on human resources, legal services, management consulting, market research, R&D, tax preparation, and training.

Also, responses suggest that companies are now using AI in more parts of the business. Half of respondents say their organizations have adopted AI in two or more business functions, up from less than a third of respondents in 2023 (Exhibit 2).

Gen AI adoption is most common in the functions where it can create the most value

Most respondents now report that their organizations—and they as individuals—are using gen AI. Sixty-five percent of respondents say their organizations are regularly using gen AI in at least one business function, up from one-third last year. The average organization using gen AI is doing so in two functions, most often in marketing and sales and in product and service development—two functions in which previous research  determined that gen AI adoption could generate the most value 3 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. —as well as in IT (Exhibit 3). The biggest increase from 2023 is found in marketing and sales, where reported adoption has more than doubled. Yet across functions, only two use cases, both within marketing and sales, are reported by 15 percent or more of respondents.

Gen AI also is weaving its way into respondents’ personal lives. Compared with 2023, respondents are much more likely to be using gen AI at work and even more likely to be using gen AI both at work and in their personal lives (Exhibit 4). The survey finds upticks in gen AI use across all regions, with the largest increases in Asia–Pacific and Greater China. Respondents at the highest seniority levels, meanwhile, show larger jumps in the use of gen Al tools for work and outside of work compared with their midlevel-management peers. Looking at specific industries, respondents working in energy and materials and in professional services report the largest increase in gen AI use.

Investments in gen AI and analytical AI are beginning to create value

The latest survey also shows how different industries are budgeting for gen AI. Responses suggest that, in many industries, organizations are about equally as likely to be investing more than 5 percent of their digital budgets in gen AI as they are in nongenerative, analytical-AI solutions (Exhibit 5). Yet in most industries, larger shares of respondents report that their organizations spend more than 20 percent on analytical AI than on gen AI. Looking ahead, most respondents—67 percent—expect their organizations to invest more in AI over the next three years.

Where are those investments paying off? For the first time, our latest survey explored the value created by gen AI use by business function. The function in which the largest share of respondents report seeing cost decreases is human resources. Respondents most commonly report meaningful revenue increases (of more than 5 percent) in supply chain and inventory management (Exhibit 6). For analytical AI, respondents most often report seeing cost benefits in service operations—in line with what we found last year —as well as meaningful revenue increases from AI use in marketing and sales.

Inaccuracy: The most recognized and experienced risk of gen AI use

As businesses begin to see the benefits of gen AI, they’re also recognizing the diverse risks associated with the technology. These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which tend to focus on inaccurate output or lack of explainability. A third big risk category is security and incorrect use.

Respondents to the latest survey are more likely than they were last year to say their organizations consider inaccuracy and IP infringement to be relevant to their use of gen AI, and about half continue to view cybersecurity as a risk (Exhibit 7).

Conversely, respondents are less likely than they were last year to say their organizations consider workforce and labor displacement to be relevant risks and are not increasing efforts to mitigate them.

In fact, inaccuracy— which can affect use cases across the gen AI value chain , ranging from customer journeys and summarization to coding and creative content—is the only risk that respondents are significantly more likely than last year to say their organizations are actively working to mitigate.

Some organizations have already experienced negative consequences from the use of gen AI, with 44 percent of respondents saying their organizations have experienced at least one consequence (Exhibit 8). Respondents most often report inaccuracy as a risk that has affected their organizations, followed by cybersecurity and explainability.

Our previous research has found that there are several elements of governance that can help in scaling gen AI use responsibly, yet few respondents report having these risk-related practices in place. 4 “ Implementing generative AI with speed and safety ,” McKinsey Quarterly , March 13, 2024. For example, just 18 percent say their organizations have an enterprise-wide council or board with the authority to make decisions involving responsible AI governance, and only one-third say gen AI risk awareness and risk mitigation controls are required skill sets for technical talent.

Bringing gen AI capabilities to bear

The latest survey also sought to understand how, and how quickly, organizations are deploying these new gen AI tools. We have found three archetypes for implementing gen AI solutions : takers use off-the-shelf, publicly available solutions; shapers customize those tools with proprietary data and systems; and makers develop their own foundation models from scratch. 5 “ Technology’s generational moment with generative AI: A CIO and CTO guide ,” McKinsey, July 11, 2023. Across most industries, the survey results suggest that organizations are finding off-the-shelf offerings applicable to their business needs—though many are pursuing opportunities to customize models or even develop their own (Exhibit 9). About half of reported gen AI uses within respondents’ business functions are utilizing off-the-shelf, publicly available models or tools, with little or no customization. Respondents in energy and materials, technology, and media and telecommunications are more likely to report significant customization or tuning of publicly available models or developing their own proprietary models to address specific business needs.

Respondents most often report that their organizations required one to four months from the start of a project to put gen AI into production, though the time it takes varies by business function (Exhibit 10). It also depends upon the approach for acquiring those capabilities. Not surprisingly, reported uses of highly customized or proprietary models are 1.5 times more likely than off-the-shelf, publicly available models to take five months or more to implement.

Gen AI high performers are excelling despite facing challenges

Gen AI is a new technology, and organizations are still early in the journey of pursuing its opportunities and scaling it across functions. So it’s little surprise that only a small subset of respondents (46 out of 876) report that a meaningful share of their organizations’ EBIT can be attributed to their deployment of gen AI. Still, these gen AI leaders are worth examining closely. These, after all, are the early movers, who already attribute more than 10 percent of their organizations’ EBIT to their use of gen AI. Forty-two percent of these high performers say more than 20 percent of their EBIT is attributable to their use of nongenerative, analytical AI, and they span industries and regions—though most are at organizations with less than $1 billion in annual revenue. The AI-related practices at these organizations can offer guidance to those looking to create value from gen AI adoption at their own organizations.

To start, gen AI high performers are using gen AI in more business functions—an average of three functions, while others average two. They, like other organizations, are most likely to use gen AI in marketing and sales and product or service development, but they’re much more likely than others to use gen AI solutions in risk, legal, and compliance; in strategy and corporate finance; and in supply chain and inventory management. They’re more than three times as likely as others to be using gen AI in activities ranging from processing of accounting documents and risk assessment to R&D testing and pricing and promotions. While, overall, about half of reported gen AI applications within business functions are utilizing publicly available models or tools, gen AI high performers are less likely to use those off-the-shelf options than to either implement significantly customized versions of those tools or to develop their own proprietary foundation models.

What else are these high performers doing differently? For one thing, they are paying more attention to gen-AI-related risks. Perhaps because they are further along on their journeys, they are more likely than others to say their organizations have experienced every negative consequence from gen AI we asked about, from cybersecurity and personal privacy to explainability and IP infringement. Given that, they are more likely than others to report that their organizations consider those risks, as well as regulatory compliance, environmental impacts, and political stability, to be relevant to their gen AI use, and they say they take steps to mitigate more risks than others do.

Gen AI high performers are also much more likely to say their organizations follow a set of risk-related best practices (Exhibit 11). For example, they are nearly twice as likely as others to involve the legal function and embed risk reviews early on in the development of gen AI solutions—that is, to “ shift left .” They’re also much more likely than others to employ a wide range of other best practices, from strategy-related practices to those related to scaling.

In addition to experiencing the risks of gen AI adoption, high performers have encountered other challenges that can serve as warnings to others (Exhibit 12). Seventy percent say they have experienced difficulties with data, including defining processes for data governance, developing the ability to quickly integrate data into AI models, and an insufficient amount of training data, highlighting the essential role that data play in capturing value. High performers are also more likely than others to report experiencing challenges with their operating models, such as implementing agile ways of working and effective sprint performance management.

About the research

The online survey was in the field from February 22 to March 5, 2024, and garnered responses from 1,363 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 981 said their organizations had adopted AI in at least one business function, and 878 said their organizations were regularly using gen AI in at least one function. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

Alex Singla and Alexander Sukharevsky  are global coleaders of QuantumBlack, AI by McKinsey, and senior partners in McKinsey’s Chicago and London offices, respectively; Lareina Yee  is a senior partner in the Bay Area office, where Michael Chui , a McKinsey Global Institute partner, is a partner; and Bryce Hall  is an associate partner in the Washington, DC, office.

They wish to thank Kaitlin Noe, Larry Kanter, Mallika Jhamb, and Shinjini Srivastava for their contributions to this work.

This article was edited by Heather Hanselman, a senior editor in McKinsey’s Atlanta office.

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