U.S. companies keep making incremental moves to better their products and services, but they’re still falling well short of customer expectations. And it’s leading to a growing “switching economy.”
According to Accenture’s latest Global Consumer Pulse Research, the switching economy (defined as the potential revenue up for grabs due to changes in consumer spending and switching among brands and providers) is now $1.6 trillion, a 29% increase from 2010.
“Customer expectations continue to rise year after year, and companies have not been able to keep up,” Robert Wollan, senior managing director at Accenture Strategy, tells Marketing Daily. “They’ve been focused on doing things a little bit better, instead of being focused on doing things differently.”
In a global survey that included more than 2,000 U.S. respondents, more than half (56%) of U.S. consumers said the number of brands they consider for a given product or service has increased significantly over the past 10 years. Nearly as many (46%) said they’re more likely to switch providers than they were 10 years ago.
The top complaints among consumers have remained startlingly the same. Failure to quickly resolve an issue, lengthy hold times, and interacting with representatives who cannot provide a solution are the top three frustrations for customers, as they have been for the past six years.
Meanwhile, disruptors (such as ride-sharing and accommodations marketplaces) have created raised expectations overall, Wollan says. Many companies are having trouble keeping up not only with changes in their own sectors, but with developments overall. For example, customers who have the ability to track an online pizza delivery order wonder why they can’t do the same with an auto insurance claim, he says.
“Customers are taking things from one industry and unfairly [from a business point of view] applying it to others,” he says. “‘In process’ is no longer an acceptable answer for any industry.”
The upshot: stagnant loyalty and word-of-mouth recommendations. According to the survey, only a quarter of consumers (28%) are loyal to their providers and brands and fewer than a third (31%) are willing to recommend those providers and brands to others, numbers that have remained consistent over the past several years. Meanwhile, about a third of consumers (34%) have said they’re open to purchasing products and services from non-traditional (i.e., digital or online-only) providers.
“We’re seeing a rapid rise of non-traditional players that have made it easy and transparent to work with them,” Wollan says. To stem the tide, companies need to understand their customers, the interactions they want, and what makes them feel valued.
“Don’t try to fix it with a one-size-fits-all solution, because that’s obviously not working,” Wollan says. “Pick a group you can make a difference with, and start with getting that right. Pick a segment, make sure it’s noticed and getting cared for.”
There’s also one other bright side. Dropping loyalty also presents an opportunity to win back customers who might previously have left. Still, to do so, companies need to make broad changes to satisfy current (and potential) customers before losing them entirely, he says.
“The traditional players have started to see where the chinks in the armor are, and they’re starting to address them,” Wollan says. “I think there’s a real opportunity for companies to step up and fix this [expectation] gap.”