Customer churn: Not always due to poor customer service

Customer churn: Not always due to poor customer service

By Eden Estopace | Feb 13, 2012
In a highly competitive business environment, it is difficult enough to find the magic formula for engaging customers via multiple channels. But when customers send mix signals -- switching companies or brands while giving high marks for customer satisfaction -- the rules of customer acquisition and retention change and become doubly difficult for marketers.

Accenture's 2011 Global Consumer Research Study, which surveyed consumers in 27 countries on issues ranging from service expectations to purchasing intentions, offers a comprehensive view of this trend and provides insights on how organizations can best align their strategies. But first the facts:

Of the 10 service characteristics evaluated, satisfaction rates on three customer service characteristics jumped by more than five percentage points from 2010. Around 18 percent reported, for example, that they were extremely satisfied with the service of employees who are very polite and friendly, while 36 percent said they were very satisfied. This figure is 5 percent higher than those who said so in 2010. A four percent increase was also noted in ratings given to companies with employees who are knowledgeable and well informed.

However, 66 percent of respondents said they switched providers, compared to the 64 percent who said so in 2010. The respondents also reported they have higher expectations now than in the previous year.

About 16 percent in the emerging markets said they have much higher expectations now compared to the 14 percent who said so in 2010. Those who said they have "slightly higher" expectations also rose to 43 percent from 32 percent a year ago. In the mature markets, on the other hand, majority of consumers (60 percent) said their expectations were the same, compared to the 51 percent who said so n 2010. Those with "much higher" expectation also dropped from 10 percent to 8 percent. This underscores the need for different approaches in different markets.

High on the consumer's priorities in the various customer service areas were: having employees who are knowledgeable and well-informed, being able to resolve questions/issues on their own, having employees who are polite and friendly, and having customer service people who can deal with their issue without having to refer them to another person or without speaking to a service agent.

About 64 percent of consumers globally said they like it when a company recognizes them for doing more business with them, and 65 percent said they like it when companies provide them with special treatment when they do more business with them. In emerging markets, the figures are slightly higher at 65 percent and 71 percent, respectively. In mature markets, the figures are slightly lower at 62 percent and 60 percent, respectively.

The persuasiveness of loyalty programs are highest in the wireless, cellphone commies (57 percent), retail (57 percent) and Internet Service Providers (55 percent).

Meanwhile, the industries that experienced the most partial switching (or consumers saying they stayed with companies they've always done business with but tried other providers as well) were: consumer goods retail (35 percent), consumer electronics (32 percent), and travel and tourism. Those with lower partial switching rates were: ISPs (19 percent), landline phone companies (19 percent), and gas and electric utilities.

“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, 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,” he added.

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