66% of consumers defected somewhere in 2011

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By: Wise Marketer Staff |

Posted on February 9, 2012

Two out of three (66%) consumers switched suppliers - including wireless phone, cable and utilities - as a result of poor customer service in 2011, even as their satisfaction with the services provided by those companies rose, according to research from Accenture.

The research findings pose new challenges for marketers as they focus on building customer loyalty and improving market share in a very competitive business environment. The Accenture Global Consumer Survey asked consumers in 27 countries to evaluate 10 industries on issues ranging from service expectations and purchasing intentions to loyalty, satisfaction and switching.

Among the 10,000 consumers who responded, the proportion of those who switched companies for any reason between 2010 and 2011 rose in eight of the 10 industries included in the survey. Wireless phone, cable and gas/electric utilities providers each experienced the greatest increase in consumer switching - five percentage points. This includes consumers who switched entirely to another provider as well as those who continued to do business with their current provider but added services from another provider - a new, but growing trend. According to the survey, customer switching also increased by 4% in 2011 in the fixed line phone and internet service sectors.

The survey also found that fewer than one-quarter (23%) of consumers surveyed feel "very loyal" to his or her providers, while 24% indicated that they had no loyalty at all. And, only half (49%) indicated that they are strongly influenced by at least one loyalty programme offered by their service providers.

At the same time, however, consumer satisfaction with their providers' customer service actually increased in 2011 in 10 attributes measured by the survey. These attributes include the wait time for service (33% satisfied compared to 27% in 2010), the ability to resolve issues without speaking with an agent (38% satisfied compared to 33% in 2010) and speaking with just one customer service agent to resolve an issue (39% satisfied compared to 32% in 2010).

"Companies are improving many of the most frustrating parts of the customer service experience, but they are facing a customer who is increasingly willing to engage multiple providers for a service and is apt to switch quickly," said Robert Wollan, global managing director for Accenture Customer Relationship Management. "While high-quality sales and service in areas such as product knowledge and efficient issue resolution remain a basic requirement, in order to achieve sustainable, profitable growth, companies must better understand what really keeps their customers engaged by examining a number of overlooked, but critical points of interaction in the customer relationship."

The study identified a number of blind spots in the customer relationship that many companies appear to be overlooking. Addressing these issues may enable organisations to improve customer retention and stem the tide of switching. Most noteworthy among the blind spots identified:

  • Organisations are failing to offer consumers opportunities to engage with them, including through digital channels Consumers expect a multi-channel experience, and in fact, 57% reported frustration when they were not able to access company information or purchase a product through the channels of their choice. And, according to the survey, social media sites have improved overall engagement of consumers with providers and their brands, up from 14% in 2010 to 21% in 2011. More than a quarter (27%)of consumers want companies to interact with them in social media environments even before they are customers, and 24% reported greater likelihood of doing business with providers that are actively engaged with social media.
  • Companies are overlooking signs that customers are itching to switch Although complete switching from one service provider to another did not increase significantly, the rate of partial switching, in which consumers stay with their current provider but add another provider, is up in each of the 10 industries surveyed. Retail banking experienced a one percent drop (from 16% to 15%) in complete switching from 2010 to 2011, yet partial switching was up three percent (from 24% to 27%). Wireless phone companies experienced a two percent increase in complete switching year over year (from 19% to 21%), but when adding in those who made a partial switch, the combined switching rate increased by five percent (from 38% to 43%).
  • Companies are failing to keep promises they make on the service experience The study found that consumers rate "having the service experience match the promise a company makes to me up front" as one of the most important areas of customer service. Yet the greatest service frustration cited is a provider's failure to deliver on the service experience promised up front.

As companies tackle these blind spots, building a solid foundation in data, analytics and research will help clarify the voice of the consumer, making the task of identifying and responding to rapid changes in consumer behaviour easier. And better harnessing the power and value of customer analytics will help marketers identify the key moments of change, as well as competitive threats, service opportunities, and position the company to more effectively deliver on its brand promise.

The survey included online responses from more than 10,000 people in 27 countries: Argentina, Australia, Belgium, Brazil, Canada, China, Czech Republic, France, Germany, India, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, the Philippines, Russia, Singapore, South Africa, South Korea, Spain, Turkey, the United Arab Emirates, the United Kingdom and the United States. Respondents were asked to assess their experiences with companies in 10 industries: travel & tourism, life insurance, consumer goods retailers, consumer electronics manufacturers, retail banking, internet service providers, cable/satellite, fixed line phone, wireless phone and gas/electric utilities.

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