Customers are getting less loyal to brands

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By: Wise Marketer Staff |

Posted on August 28, 2014

Customers are getting less loyal to brands

Poor customer service is eroding consumer loyalty and confidence in retail brands, according to research commissioned by customer service specialist KANA Software.

Nearly one-third of UK consumers (30%) have become less loyal to retail brands in the past five years, and one quarter of those customers identified poor service as the main reason for their decreased loyalty.

One major issue for customers was the number of times they had to repeat their complaint to different people within the same company. Almost half of respondents (48%) said they had to repeat information during their last communication with a retailer.

All age groups identified repetition as a problem; however, it occurs most frequently for customers under the age of 35-with one in 20 repeating themselves at least five times. Only 30% of these younger customers had their issue resolved after one interaction. By contrast, 64% of customers over the age of 65 did not have to repeat their complaint at all, feeling satisfied after first contact.

This apparent disparity between levels of service has the potential to drive younger consumers elsewhere. Of those who feel less loyal to retail brands, 37% of 18-to-24-year-olds cite service as the key factor versus just 20% of those aged 65 and older.

"By forcing consumers to repeat themselves, often several times over a prolonged period, organisations not only deliver inefficient service that costs them money-they seriously affect future consumer loyalty," explained Steven Thurlow, head of worldwide product strategy for KANA. "The need for repetition shows not only poor management of customer data, channels and context, but more fundamentally a lack of ownership of the consumer's problem and lack of appreciation for their effort levels."

The younger generation has higher expectations of digital channels, collaborative and social communications and often asks "how hard can it be?" - and in fact they won't take seriously any organisation that is unable to get the basics right.

During the previous six months, more than one in ten adults polled had used at least five different customer channels to contact a retailer. This agrees with other studies from KANA showing that UK consumers regularly use multiple different channels of contact. Web-based chat, email and face-to-face in store came out as the most popular choices for customer engagement, with preference varying between age groups.

"When you have an issue, you want to speak to someone who knows your history and is able to take action on your behalf. Repetition causes frustration and makes customers feel devalued or, worse, completely ignored. Without a true sense that different channels of communication are linked, people feel that they are wasting their time and, ultimately, this leads to an erosion of loyalty in the retail brand," Thurlow concluded.

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