Commentary

Harness the Switching Economy

According to the recently released study by Accenture, “Accenture Customer 2020,” measuring consumer experiences with marketing, sales and customer service, though customer expectations have steadily risen in 10 years, most companies have not been able to keep pace. As a result, the “Switching Economy,” the potential revenue up for grabs in the U.S. market due to changes in consumer spending patterns and switching rates, has swelled to $1.6 trillion, a 29% increase since 2010.

advertisement

advertisement

The study reveals how digital technologies have continued to reshape customer behavior and needs to the point at which all customers have become digital customers, albeit ones who move at different speeds. Yet it also shows that companies have struggled to keep pace with these changes—so much so that customers still encounter confusing web sites, staggering call center wait times, and difficulty solving their problems no matter which channel they use. It all adds up to increased customer switching.

The research provides a window into some of the dramatic changes that have occurred during the past 10 years in how consumers learn about companies and brands, purchase products and services, and access customer service and support as part of the customer journey. Consumers now:

  • Five years ago, 78 percent of consumers used at least one online channel when prospecting. Today, 88 percent do—and four in 10 want even more digital interactions than what companies are providing.
  • Two-thirds said the number of companies or brands they consider for purchase has increased significantly compared with 10 years ago.
  • Compared with two years ago, four in 10 consumers find themselves evaluating or considering other providers more often.
  • Compared with 10 years ago, just over half rely much more on other people’s experiences or reviews to inform their purchase decisions.
  • Nearly two-thirds said they use online channels across sales, marketing, and service because of their speed and convenience. Just over half said they have become more impatient and want their buying decision process to be fast with minimal effort.

The “Switching Economy” potential and its growth rate is estimated based on Accenture’s analysis of customer switching rates patterns, says the report, as well as consumer spending evolution across utilities, communications, financial services, insurance, consumer goods retail, consumer electronics and hotels and lodging across 17 countries. The Global Switching Economy is estimated at $6.2 trillion in 2014

Switching Economy: 5 Year Growth (Total Potential Estimate, In Trillion US$, Constant Values)

 

Potential (Trillion $)

 

Markets

2010

2014

%Growth

GlobalKey markets

$4.9T

%6.2T

26%

MatureKey markets

3.2

4.0

25%

EmergingKey markets

2.2

1.7

29%

Source: Accenture, July 2015

A customer’s path to purchase used to be generally predictable, flowing through stages of awareness, consideration, evaluation, purchase, and use, says the report. However, the research shows that this traditional sales and marketing funnel has been supplanted by a new model that’s driven by digital technologies. Today’s customer journey is dynamic, accessible and continuous because the digital touch points consumers are exposed to are always on, and customers can constantly re-evaluate their purchase options.

Enabled by technology, customers expect to easily control and vary their routes within and across channels to suit their needs at any given moment. While customers move at different speeds and take different paths, every customer is now a digital customer, from the traditional customer to the

digital-savvy one.

As a result of these trends, today’s Nonstop Customers find it easier to compare a provider’s promise with its delivery and how the overall customer experience meets their own expectations, and subsequently make changes if they find their provider isn’t as “digitally intense” as they would want it to be, concludes the report.

The research has identified eight trends that illustrate the ongoing struggles companies face in keeping pace with a consumer base that seems to get further removed from them with each passing year:

  • Trend #1: Customers are buying less from current providers, always keeping one eye open for something new
  • Trend #2: Companies are still inviting customers to leave by failing to improve first-contact resolution
  • Trend #3: Companies aren’t capitalizing fully on their own website and other channels they control to make it easier for customers to prospect
  • Trend #4: Customers still encounter significant barriers that prevent them from more widely adopting the digital service channels they want
  • Trend #5: Customers’ service expectations are rising faster than companies are willing to adapt
  • Trend #6: Customer loyalty program adoption is rising, but it’s still not preventing customers from switching
  • Trend #7: Lack of compelling offers prevents companies from winning back customers
  • Trend #8: “Non-traditional” competitors are gaining ground with consumers

The report concludes by noting that the shift from over-investing in cost cutting to an aggressive growth agenda has shifted the focus from internal efficiency improvements (e.g. paperless billing programs) to investments that make growth the highest priority in the business metrics that matter. This means an almost single-minded focus of resources on initiatives that customer analytics prove are truly relevant to customers and that deliver business results.

For the PDF file of the detailed report, please visit Accenture here.

4 comments about "Harness the Switching Economy".
Check to receive email when comments are posted.
  1. Neil Mahoney from Mahoney/Marketing, July 21, 2015 at 8:23 a.m.

    Most company websites are user-hostile to the extreme.  Sales pitches inviting the gullible prospect to use gimmicks (cards that pose as credit cards) to get "great savings" turn out to be infuriating disappointments.  After you struggle and struggle to get your account straight, the "great savings" turn out to be hand cream.  I felt like Ralphie in "Christmas Story" when he got his decoder ring, sat by the radio in excitement, and was angered only to find the secret message revealed by his decoder ring was a "crummy commercial.''

  2. Neil Mahoney from Mahoney/Marketing, July 21, 2015 at 8:32 a.m.

    PS to all CMOs:  Do you ever check your sites to verify their user-friendliness?  Almost all sites I have encountered are user-hostile to the Nth degree.  Even if you click on "Contact Us" the form is so rigid and difficult to use it frustrates the prospect.  The first basic of selling is to make it easy for the customer to buy.

  3. Neil Mahoney from Mahoney/Marketing, July 21, 2015 at 9:32 a.m.

    Trend #9: Companies, who in most cases are trustworthy, greatly oversell their "special offers" to heretofore trusting customers.

  4. Andrew Mah from Fresh Digital Group, July 21, 2015 at 10:57 a.m.

    Good report, these trends just point to me the fact that consumers are expecting more from their providers, some of which comesin the form of simplicity and ease of use. The current industry models and providings will likely change in the next few years to reflect changes in consumer wants and needs.

    Side note, take a look at the chart. I am fairly certain that 2010 and 2014 data are switched around for emerging markets data.


Next story loading loading..