Why customers defect to other companies
Among fixing other things, businesses can prevent customers from defecting to other companies by keeping their promises and ensuring a better customer service experience.
Thu, Dec 06, 2012 at 11:56 AM
One in five consumers bailed out on a company they had been doing business with this year, up slightly from customer defection levels in 2011, a new survey found. But the majority of defecting customers say that those companies could have done things differently to keep them from switching.
A survey of more than 12,000 customers in 32 countries found that 85 percent of customers could have been persuaded to stay with a company if the company had acted differently. Two-thirds of them (67 percent) said they would have stayed if their customer service issue had been resolved during their first contact. The survey was conducted by Accenture, a management consulting, technology services and outsourcing company.
More than half (54 percent) said they would have stayed as customers if they had been rewarded for doing more business with the company.
Broken promises are a top area of frustration for consumers, according to the survey: nearly two-thirds (63 percent) of respondents said they were extremely frustrated when a company delivered a different customer service experience from what it initially promised. Seventy-eight percent of consumers said they are likely to switch providers when they encounter such broken promises.
Other frustrations that can prompt customers to switch include having to contact customer service several times for the same reason (66 percent), dealing with surly customer service agents (65 percent) and being put on hold for a long time when calling customer service (61 percent).
The survey revealed that, of the 10 industries covered, the largest increases in switchovers were among wireless phone providers (26 percent of consumers switched in 2012, up from 21 percent in 2011); Internet service providers (23 percent switched, up from 19 percent in 2011) and retailers (22 percent switched, up from 16 percent in 2011).
"The sobering reality is that 'tried and true' strategies for customer acquisition, loyalty and retention are struggling to keep pace with consumers who are perpetually in motion, more technologically savvy than ever and increasingly unpredictable," said Robert Wollan, a global managing director for Accenture. "The news this year is that customers want to be loyal, but customer service often fails to meet their expectations. In the digital marketplace, companies must improve social listening capabilities and apply predictive analytics designed to quickly identify and respond to potential customer issues before problems arise."
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