More Consumers Churning, But They'd Rather Stay
More consumers than ever are switching the companies they buy products or services from (particularly if those products or services are wireless phone, Internet or retailing industries), but they aren’t necessarily happy about it.
According to Accenture’s eighth annual Global Consumer Survey, one out of every five people (20%) switched the companies they typically buy from, an increase of 5% over 2011. However, 85% of those people said the companies could have done something differently to prevent them from switching.
According to the survey (which polled 12,000 people in 32 countries), among those who said they would have stayed if the provider had acted differently, two-thirds (67%) said having an issue resolved during their first customer-service contact would have changed their minds. More than half (54%) said they might have had a change of heart if they had been better rewarded for remaining loyal.
“That overwhelming majority is basically saying they don’t want to switch, but either an overt action -- or more importantly an inaction -- by a company caused [them to switch],” Robert Wollan, global managing director of sales and customer services at Accenture, tells Marketing Daily. “Think of how much revenue is at risk. You’ve got to get the basics right.”
Among the 10 industries covered in the survey, the ones with the highest switching rates were the wireless phone industry (26%), Internet service (23%) and retailers (22%). Wollan notes that these industries -- particularly wireless and Internet -- have come to accept customer churn as a matter of business, but they don’t have to.
“There’s hyper-competition in those marketplaces. That hasn’t changed,” Wollan says. “What’s different is that it doesn’t have to be baked in to [those industries]. They don’t have to accept those high, high levels of churn as part of their everyday operations. The opportunity for them is massive.”
Among the top complaints: the broken promise of not following through with customer service on promises made upfront. More than three-quarters (78%) said they were likely to switch when they encounter such broken vows.
People also have increasing expectations about how much a company should know about them. Half of the survey respondents said it’s extremely important for customer service representatives to know their history so they don’t have to repeat themselves during a service call. A third said they prefer companies that use information to make the customer service experience more efficient, but only a quarter said their current providers offer such a tailored experience. (The travel and tourism, retail banking and life insurance industries earned the highest marks in this area, according to the survey.)
“Expectations are rising faster than companies are able to respond,” Wollan says. “It’s not that companies aren’t trying to move forward, they’re just not keeping up with the customer.”