More than two-thirds of American consumers (68%) said they want to take their business elsewhere - or have actually done so in the past two years - as a result of a poor customer experience, according to a survey by loyalty marketing firm Maritz.
Despite the fact that customer experience appears to present a significant opportunity for a competitive advantage, the phenomenon is worryingly rare, the study found. Maritz concluded that many companies have a lot to be worried about when it comes to the overall customer experience they deliver every day.
Impact of poor service
More than two-thirds of the consumers surveyed (68%) reported that they had, in the past two years, defected or considered defecting from a company they had frequently used within the eight industries studied. And of those who left a company, 43% cited "service experience" as their main reason for doing so. Among those leaving due to a poor service experience, 77% said they chose to leave because of employee attitudes, and 83% said they had told others about their negative experience.
According to Scott Bush, CMO for Maritz, "Companies that pride themselves only on product quality - or focus solely on low prices - are falling short. It is the customer experience that can potentially be a positive differentiator or a serious downfall. Consumers have made it clear that they won't stand for poor service experiences, and that they will take their business elsewhere."
Drivers of service-related defection
Bush also pointed out that, above all else, companies must understand the critical role that employees play in making customer experiences stand out, and in driving customer loyalty.
Indeed, as the survey highlighted, the interaction between the employee and the customer is often cited as the reason for customers defecting. Respondents who defected due to service issues did so because of:
- Poor customer service systems or policies (85%);
- The poor attitude of an employee (77%);
- An employee's low level of knowledge about how to help (76%);
- An employee's lack of decision-making authority or empowerment to help (72%).
Steps toward service improvement
While the number of consumers leaving companies because of poor service and employee attitudes is worrying, Bush says that the situation can be helped relatively easily: "Most customer experience management programmes fail because companies implement top-down, one-size-fits-all solutions and don't focus on the one component that can truly affect the customer experience: the employees. Instead, companies must align their operations, their marketing programmes and their front-line employees to deliver a good customer experience that matches the promises made in the marketplace."
According to Bush, the following areas are worth considering to improve the interplay between employees and customers:
- Don't just measure... measure deeper and better.
Most customer satisfaction market research just scratches the surface and doesn't provide meaningful measurements that allow companies to impact the customer experience. Find out not only whether a customer is satisfied with an experience, but also what's behind their choice.
- Take a grass-roots approach to making changes.
Most organisations operate top-down command and control systems, making decisions at an executive level and pushing it down through managers and supervisors. However, when training and interventions happen at the local level, the "owners" of the customer experience are engaged in solving customer experience problems and making necessary changes.
- Avoid one-size-fits-all motivation plans.
Some companies make a brand promise but have little idea whether employees are truly equipped, engaged and motivated to fulfil that promise. Understanding what motivates a diverse group of people, and what factors are driving current behaviour, is imperative to creating employee motivation that drives the right behaviour throughout the company.
- Connect silos to create a centralised focus on customers.
Ensure that all of the business functions that impact the customer experience are aligned at the senior level, including marketing, research, training, and corporate strategy. All executives should see the same research, agree on a plan, and then execute that plan together.
This survey questioned 1,008 randomly selected adults throughout the US about defection and service delivery in eight industries (airline, automotive, banking, financial services, hotel, restaurant, retail and telecom).