Lifetime loyalty disappears as consumers get tough

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Forty-four per cent of UK customers changed at least one of their suppliers over the last year, while almost half of those asked had made a complaint, according to a new report from KPMG Consulting.

After years of enduring junk mail, customers are wary of parting with personal information. Web buyers who have difficulties completing a purchase often don’t try again.

The report ‘Customer Management – Who Manages Whom?’, shows that utility companies are at greatest risk of defection, a quarter of respondents having changed their gas or electricity provider in the last 12 months. Sixteen per cent and 14% of respondents respectively have changed their supermarket and phone company. At the other end of the scale, only 6% of respondents were found to have changed their current account or credit card supplier in the last year.

Louise Fletcher, partner at KPMG, commented: “This research shows that customer loyalty cannot be taken for granted and that companies must give customers a compelling reason to retain the same supplier.”

While customers were unwilling to provide companies with information about themselves, they still expected organisations to have details of why they had contacted them in the past, and 51% said they found it annoying to be asked for the same information every time they contacted a company. Yet, 35% were unhappy for companies to collect their personal details, even if this helped them provide a better service. Most customers dislike unsolicited contact, particularly from companies that are not their suppliers.

Fletcher believes that customers wish to be in control of the relationship with suppliers: “Customers seem unwilling to provide personal information and to accept unsolicited contact. This is undoubtedly because many companies have been clumsy in the past – not only has their use of customer data been unsophisticated, but their methods of contacting potential customers have been intrusive.

“This survey shows that companies need to shift the focus away from direct mail or unsolicited phone calls, and concentrate on making the most of the approaches customers make to them. If a customer contacts a company with a service request or enquiry, this may be an opportunity to sell them other products, inform them of new offerings or subtly gain information, without jeopardising the relationship,” Fletcher added.

Other findings of the survey included:
• Friends were the most important source of information for those considering changing supplier, more popular than looking at brochures or advertising, reading newspapers, calling the company directly or looking on the internet.
• Almost half of respondents have contacted at least one supplier at least once to complain in the last year. These complaints may offer a valuable and frequent source of interaction with customers, as well as important information.
• Companies have one chance to get it right . When customers were asked what they would do if a purchase made on the internet failed, the most popular option was ‘cancel and refund’.

* Research was carried out by Simpson Carpenter during May 2000 among adults in the UK. 750 people answered a range of questions about their dealings with companies in the following sectors: utilities (gas and electricity), telecoms (including mobiles), banking and grocery retail.

KPMG

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