The economic downturn means the customers aren’t just kings, they’re emperors.’ That was how Lyssa McGowan, a brand director at Sky Broadband, responded in Marketing Week to consumer research showing that companies are losing an alarming number of customers because of poor service and rewards.
The magazine published in the spring the results of a global survey of more than 12,000 consumers in 32 countries conducted by Accenture, the management consultancy. It found that 48% of consumers have changed providers – of any type of brand in the past year – because of poor customer service.
Retailers saw 20% of people switching to rivals, with banks, internet service providers (ISP) and utility companies next, all losing 12% of their customers.
Yet 85% of those surveyed said they would have stayed if a company had acted to retain their loyalty, the magazine reported.
McGowan said the research showed that, with purse strings tight, consumers are becoming less tolerant of brands that don’t treat them as VIPs. Social media gives people a place to vent their frustrations when companies let them down, though Facebook and Google+ and other sites are not yet places where they go to find out what people think of rival offerings.
Sky’s own research shows over half the UK adult population have never switched ISP because of the perceived complexity. At Sky, a ‘broadband switch squad’ now handholds customers through the process, keeping them informed of progress in ways that suit, whether texts, emails or phone calls.
A lot of effort is going into prising customers away from their current provider, whether their favoured supermarket, energy supplier or mobile phone network.
But Rachel Barton, the managing director for CRM at Accenture UK & Ireland, told the magazine: ‘The risk is that marketing will simply end up being an acquisition engine that keeps reacquiring customers that have just churned.’
That, of course, is what’s happening whenever you see a company trying to lure new business by offering a product or service at a better price or rate than existing customers receive.
The impact of this type of marketing effort, according to Accenture, is to create the ‘nonstop consumer’ who is constantly evaluating what to buy and who from.
Churn, it seems, is here to stay. But as Market Wizdom, which mentors aspiring entrepreneurs, points out: ‘The easiest way to grow your business it not to lose your customers.’
Why that should be and how you can go about retaining customers will be the subject of my next blog. At SJ Collections we have long experience of assisting companies when customer relationships go wrong, particularly where bills are left unpaid. That means we can advise you on effective ways to build and maintain your business.