Causes of churn: Bad products vs. bad service

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By: Wise Marketer Staff |

Posted on April 20, 2007

British consumers are more likely to complain about a lack of responsiveness to what they perceive as customer service issues than about poor product quality, according to a survey commissioned by RightNow Technologies, conducted by YouGov.

The survey asked 2,800 consumers how they felt about customer experiences provided by British organisations, and found that 69% of adults had complained to a company (up from 55% in 2006) and that 79% of these had complained about their treatment up to five times in the past 12 months.

Expectations not met
The research highlighted an obvious gap between consumer expectations following a complaint and the actual resolution of the complaint (if at all). Three out of five consumers (60%) said they expect a problem to be fixed to their satisfaction, while only 27% reported that this has been the case.

Perhaps more worryingly, given that most businesses recognise good customer relationships as being a key to success, 34% said that the company the complained to had done nothing at all after being contacted about the problem.

Communications at fault
Poorly managed customer communication was behind most of the problems reported. Telephone calls, e-mails and letters were three of the top four methods for complaining, while respondents ranked the top five things they had complained about as:

  1. Lack of response to an e-mail, telephone call or letter;
  2. Poor products or services;
  3. A poor customer experience overall;
  4. Having to repeat information over and over again;
  5. Length of time holding in a telephone queue.

More people said that they had complained about customer service than in the previous year's survey (69% in 2007 compared to 55% in 2006), and a lack of communication is what most cited as their main complaint, rather than end products or services.

A rising tide?
There are several trends that RightNow suggests may be responsible for the rising numbers of consumer complaints, such as:

  • The FSA (financial services authority) decision to control banking charges, and the increased help that consumers have had with claiming money back as a result;
  • Increased activity from other regulators such as OFCOM (the telecommunications watchdog) and OFWAT (the water utility watchdog);
  • Consumer empowerment though the web, including consumer review and complaint sites such as, and many others.

Interestingly (and perhaps ironically, with communication being the main problem) it was the telecommunications operators and ISPs that came top of the complaints list (23%), followed by banks and insurers (19%), then utility companies (17%).

Five point improvement plan
The survey report asserts that there is an ongoing opportunity for organisations to improve customer experiences by reviewing and reorganising how complaints are dealt with. As a result, RightNow has devised a five point plan to help improve the way complaints are handed:

  1. Regard complaints as essential business feedback that can drive future business decisions;
  2. Ensure that consumers can make contact through their preferred channel at any time that's convenient to them;
  3. Include all correspondence (including letters, calls, emails, faxes, web chat sessions, and so on) as part of the company's overall customer knowledge base;
  4. Set and communicate clear service level agreements (SLAs) to customers, and make sure all customer-facing staff understand the expectations customers have - and then aim to exceed them;
  5. Empower staff to make decisions and act in the customer's best interest by ensuring they have access to complete customer history data.

According to Wayne Foncette, RightNow's vice president for the UK and Ireland, "Consumer expectations are rising, so what may have been an adequate complaints procedure in the past probably won't suffice in today's marketplace where there's little to differentiate prices or products. So it's essential that organisations view how they deal with customer complaints as part of the wider customer experience strategy. Neglecting customers will send them flocking to competitors."

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