Customers Continue to Change Service Providers

September 6th, 2011
Steven Howard

Almost two-thirds switch due to poor service.

The annual Accenture Global Consumer Survey always makes for fascinating reading.

In the latest results, the sixth in this yearly series, trends seen in recent years continue:

  • 64% of consumers have switched companies in the past year due to poor customer service.
  • Consumers in emerging markets are now more likely to change service providers than those in mature markets. This is seen across all industries, but is most pronounced  within the retail and banking industries.
  • Consumer satisfaction with customer service decreased in the last year in all 11 characteristics measured.
  • Over half of global consumers (54%) are not willing to compromise on customer service delivery, product quality, or product options in exchange for lower prices.
  • When selecting new service providers, better customer service and better prices continue to be the two most sought desires.
  • Only 25% of global consumers say they trust the companies with which they do business. The least trust industries are (in order): gas and electric utilities, cable and satellite companies, landline phone companies, wireless phone companies, and life insurance providers.

The 2010 Accenture Global Consumer Survey was conducted in 17 countries, with over 5,800 respondents being asked about their attitudes and behavior towards 10 key industries.

Interestingly, the biggest drops in customer service satisfaction were for "having customer service available at convenient times" and "being able to access customer service using multiple channels." These findings support my long-held premise that convenience is now one of the most critical elements for building customer loyalty.

As we wrote in our Monday Morning Marketing Memo two weeks ago on the Unseen Costs of Lost Customers, there is tremendous cost involved in replacing lost customers and their value to any organization. Thus it amazes me that companies do not place a higher emphasis and priority in reducing customer attrition and focusing marketing efforts on keeping good customers. It is little wonder that for the past four years, the Accenture Global Consumer Survey has consistently shown that over 59% of global consumers switch at least one service provider every year due to poor customer service.

These customer defections are preventable, but this will only happen when strategic customer retention programs are put into place, such as the one designed for  a major bank, in which we reduced its credit card customer attrition levels from 16% to just under 4% in less than a year.

The costs of customer attrition are usually unseen, and as a result often do not get the attention of senior management. But these costs are real and, as we proved with this bank's credit card operations, these costs can be greatly reduced and managed.

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