Service in Chile; still a pending task

Chile is looking to certain regional neighbors like Peru, Argentina and Colombia to improve its quality of customer service. What is lacking? Greater professionalism, additional training and the implementation of best practices.

By Alejandra Aguirre M.

Over the last ten years, the quality of customer services in Chile has improved. There are now greater numbers of professionals in the field and the standards across diverse sectors of the economy have progressed in line with changes brought about by globalization. Notable among these changes are new consumer trends associated with multichannel offerings, and an increased customer demand in regard to the development and delivery of products, among other factors.

Although progress has been made, the time has come to take the next step. According to experts, the challenges are mainly those that relate to direct interactions, in which ‘good’ or ‘bad’ service is visible to the customer. This type of service is common in sectors such as retail, restaurants, hotels and tourism, telecommunications, transportation, and other more specialized areas including healthcare and banking.

Stakeholders recognize that deficiencies still remain, especially in terms of the lack of training and professionalism in certain trades. Rectifying these shortfalls would help to ensure a common service standard, as well as to address deficiencies in regard to levels of professionalism. Relevant actors also suggest that cultural factors play a role, including feelings of low valuation and social status as well as other economic aspects prevalent among service sector workers that are caused by low industry wages.

“In Chile, jobs in the services sector are considered to be of lower social status and poorly paid, whereas in the developed world they are well respected, well paid and professionalized. We have a highly complex labor market (in Chile), with low salaries, poor levels of satisfaction, with people working in jobs that they don’t like, and this of course has repercussions on how they attend to customers”, says Marta Lagos, Director of Latinobarómetro and the consultancy firm, Market  & Opinion Research International (MORI).

George Lever, Head of Research at the Santiago Chamber of Commerce (CCS), states that Chile offers a range of services based on competency and quality, with international recognition in areas such as mining engineering, earthquake-proof construction and informatics, as well as in creative fields including audiovisual production, videogames and design. Weaknesses, however, are evident due to the lack of a qualified workforce in sectors such as information and communications technology (ICT). There is also a shortage of English proficiency and a scarcity of companies willing to enter into partnerships in order to facilitate the process of breaking into international markets.

Regarding differences between a service sector worker in Chile and another country in the region, Lever claims that there are discrepancies in terms of salaries in the more specialized areas (engineering and ICT), as well as in other less-skilled positions (call centers).

This is the case in Colombia and Peru, where salaries are low in comparison to those in Chile. However, if the same example is applied to developed countries such as the United States and members of the European Union, Chile has a qualified and competitively priced workforce in highly specialized sectors.

The internal perspective

According to Lagos, the perspective of Chileans who have always lived in the country compared to that of foreigners or Chileans who have lived abroad is different in terms of service satisfaction because the latter group has a higher standard of comparison. Certain differences of perception can also be detected within Chile, depending on the sector in question. For example, Marcel Goic, Director of the Center for Retail Studies at the Universidad de Chile (CERET) says that customers tend to feel favorably towards service received at supermarkets. This is due to the nature of the purchase experience in which they, the customer, can make time available and move around the store according to their needs.

According to the CERET study, Quality of Customer Service at the Supermarket 2016, which measures the quality of service and customer satisfaction in the industry in the Greater Santiago region, 80% of people claim to be completely satisfied or as having high levels of satisfaction.

“In recent years, retail has experienced significant growth. This has impacted positively on the quality of service and, in particular, the aspects which coincide with supermarkets, which relate to a greater availability of products, accessibility, etc. Today, if you want to buy a product there are a number of models, colors, prices and qualities (from which to choose). Now, this sustained growth has also generated challenges in areas that are not so well developed, such as the human capital that is invested in the store, which is difficult to train because of its high turnover rate”, says Goic.

“We have increased by 7.1% (compared to the same study compiled in 2015) and, despite certain challenges, such as the implementation of the Labeling Act, we have maintained a standard of quality and service that has improved in terms of perception and recognition of the customer”, says Catalina Mertz, President of the Chilean Association of Supermarkets. Moreover, the report contends that Chilean supermarkets are seeing the same levels of quality in customer service as those in the developed world.

Nevertheless, the study indicates that certain areas continue to receive poor evaluations, including the quality of in-store marketing and long waiting times spent at the checkout.

The National Customer Satisfaction Index (INSC) is an additional instrument that collects metrics on the performance of service-related brands in Chile. The survey is compiled by means of telephone interviews undertaken by the non-profit ProCalidad, the mission of which is to strengthen the customer-centered focus of Chilean companies in order to increase their competiveness. The Index is well respected with trust levels of 95% and it measures sectors with high penetration in terms of population and scale.

According to the most recent results of the Index, from the first half of 2016, the worst evaluated industry is transport and logistics, with levels of dissatisfaction at 20%. This is followed by telecommunications with 17%; public sector and health services with 16%; domestic manufacturing and finance with 13%; retail with 11%; and education with 4%.

These findings demonstrate lower levels of customer satisfaction with public services than in the private sphere. According to Rodrigo González, Executive Director of the consultancy firm Petit, which specializes in internal and external services, this is due to delays in terms of the modernization of the State, despite certain public bodies being “fairly” well systematized, such as the Civil Registry Office and the Internal Revenue Service (SII).

In this sense, González comments that service should be viewed from a holistic perspective, beginning from the moment in which someone thinks about buying a product and throughout the purchase and post-purchase phases, taking account of all the human interactions involved along the way. “If I am able to resolve the problems that arise in a straightforward manner, the service is good, above all in complex procedures”, he notes.

González continues by explaining that in general, in Chile and around the world, actual customer satisfaction is considerably lower than what brands believe it to be. This sentiment has been confirmed by research conducted by the US company Oracle, which shows that in response to the statement, ‘We provide a superior customer experience’, 80% of companies reply in the affirmative, compared to just 11% of customers who agree to the sentiment, ‘I have experienced great customer experience’.

As such, González believes that the development of the country has empowered the general public, which, in turn, has resulted in harder-to-satisfy and more demanding customers. This produces a widening gap in terms of companies that have been left behind in customer service delivery, in contrast to client expectations, which keep on rising.

He states that although challenges remain, Chile today is making progress and this is reflected in large companies such as Cencosud, Latam and Movistar, which now have experienced customer service departments working in the area. These and other companies are working on providing multichannel offerings to broaden their supply and enable users to interact with their brands across a number of different platforms.

Focus on the user

Designing services that focus on the user is a global trend. This not only brings positives in terms of the end result, but also in helping to shape the organization itself. González explains that, “from the moment you are able to identify the concerns and desires of your audience, you can begin to provide a meaningful service for which, therefore, someone will be willing to pay, whether the user, the customer or a third party”.

He explains that the concern for companies in this regard and in relation to other issues in terms of the search for improvements in customer service is triggered either by negative comments or experiences by users (reactive), or because companies identify the value thereof in order to differentiate themselves from the competition in the future (proactive). To make the transformation, he says, it is necessary to change functional processes for business processes. This includes making a cultural shift to ensure that employees do not simply work within their traditional circles, but rather that they begin to interact with people from other teams and engage in collaborative and co-creative acts.

“Another key point, which is becoming more important and is something we are practising as a consultancy, is not solely working on the basis of a client or user. When you understand that the success of your business depends on different actors and not only on one or two, your proposal becomes richer and this, if it is incorporated into the design of service provision, will have positive results”, explains González.


The challenges

Lagos, the Director of MORI, warns that in order for Chile to evolve in a positive direction in the field of services, it is necessary to increase the requirements for professionals working in the area and, simultaneously, raise salaries.

“Chilean GDP has tripled but the average income has not. This year, Chile is being removed from a list of countries eligible to receive resources from the Organisation for Economic Cooperation and Development (OECD), along with Uruguay. This means that incomes in Chile are no longer those of an emerging economy, but rather that we are on the cusp of development, even though there are still people who earn less than US$1,000 a month, which is equivalent (to salaries) in underdeveloped countries. This gap is killing any type of service”, she says.

Another challenge facing the industry is internationalization. According to Lever, from the CCS, the larger companies are better at approaching the international markets and, generally, are able to establish a commercial presence abroad. On the other hand, smaller companies have to break down the cultural barriers that exist in accessing foreign markets, with different business conduct, distinct regulations, etc. These latter aspects, says Lever, require additional training in terms of the use of existing instruments that benefit service exporters, as well as greater support in relation to what business models are necessary to penetrate external markets, and more strategic and timely information needed to access other countries.

Regarding the field of retail, Goic, from CERET, believes that a shortage of material available for new areas of sale will concentrate competition in areas such as differentiation in the quality of service. “In order to grow, I’ll have to do so organically, through customer loyalty or other value propositions. In this way, the human dimension and the quality of service should take precedence over the next few years”, he anticipates.

Undoubtedly, and despite ongoing progress, there is still a long way to go in terms of improving customer service in Chile. Public and private sectors are already working towards overcoming this challenge and a number of related economic and cultural development opportunities are opening up for Chile and other countries in the region.

Training and certification

One of the greatest obstacles to overcoming aspects such as ‘attitude’ and ‘empathy’ is the lack of trade schools in which people can learn the necessary customer service skills.

Guillermo Prieto, President of the Chilean Association of Gastronomy (ACHIGA), explains his ongoing work on related roundtable events. These meetings focus on human capital to evaluate how training can be undertaken and in what areas. The aim is to identify aspects that can provide the necessary support and tools before the end of the year for his members to improve their service skills. Furthermore, he explains that ACHIGA is compiling an information manual with goals for 2017 which aim to have a positive effect on the service and, as a result, sales of member organizations.

A further area in which the government and private sector are working together to improve skills is tourism. Andrea Wolleter, President of the Federation of Tourism Companies of Chile (FEDETUR), claims that by means of the National Service for Training and Employment (SENCE) and ChileValora, the government is making progress. These schemes, she explains, are seeking to strengthen the certification of labor skills in order to improve the quality of service, which is such a fundamental part of the tourism industry. This includes attempts to enhance competencies in certain areas, including speed of attention, warmth with which the customer is dealt with, empathy, the provision of information, and general attitude.

Wolleter states that the Chilean authorities are constantly reviewing best public policy practices from other countries in the region, such as Peru, Argentina and Colombia, which are solid points of reference in terms of customer relations. Work is also being done on learning from practices in other nations, including New Zealand and Australia.

“There are no customer service schools in Chile in which waiters, waitresses or other workers can receive training. The country needs greater recognition of certain trades in the tourism sector, including valuing and reassessing them, and ensuring that they are considered respectable jobs with genuine career development pathways, in line with what occurs in developed nations”, she stresses.

The impact of immigration

The CCS states that no concrete statistics exist in regard to the effect of immigrants on the quality of service in Chile. However, observations have been made in regard to the high standards of service provision from certain individuals, although these remain far below the levels of certification required in sectors of greater value added.

In the long term, Marta Lagos explains that the arrival of immigrants has a positive effect. Service improves due to increased competition and, “you encounter people with professional-level skills but no formal qualifications, who focus on the small things and have a different approach to work. In general, immigrants work in unskilled labor, their income is of particular importance to them, or they are often overqualified for the job in hand; as a result they behave in a positive way”.