Customer churn stats point to increasingly poor experiences

15th Sep 2011

The full extent of customer churn has been revealed by a new study, with almost 10 million consumers switching to the compeition in the last six months due to a bad customer experience.

The latest Satmetrix research on customer churn published this week also found that switchers bad mouth suppliers four times more than the average consumers.
The study found that companies are continuing to lose customers often unnecessarily because they have not listened to feedback from British consumers. The top three reasons for switching in 2011 are identical to 2010, with unfair fees and charges the number one cause and rude and disinterested employees climbing one spot to number two.
In particular, the British don’t like it when they are not treated fairly or well. As a result, almost a quarter of respondents (23%) saw unfair fees or charges as the number one reason for switching and 21% identified rude or disinterested employees as the main cause. 
The study places the energy and insurance sectors at the bottom of the loyalty ladder and computer hardware and consumer electronics suppliers most likely to provide good service to their customers.
Robert Salvoni, managing director international at Satmetrix, said he was amazed that companies haven’t listened to consumers and changed their behaviour. “Recent headlines show that a number of organisations are starting to introduce new fees, which will only fuel the switching epidemic. The results also show that companies aren’t helping employees to understand the impact of their behaviour.
“With today’s tight economy and pressure on revenue and profit, it makes no sense to drive customers away for reasons that are entirely within companies’ control,” Salvoni added.
While switchers are four times more likely to advise against using a supplier than average consumers, almost four times as many (38%) consumers in the last six months have positively recommended than negatively recommended (10%). This explodes the myth that people are more likely to spread negative Word of Mouth (WOM) than positive WOM – unless they have been let down by their supplier.
“This year’s churn research reveals the double whammy of delighting customers. Not only will you keep them but you will also benefit from an extremely high level of advocacy. All the indicators prove that it pays to focus on delivering a customer experience that exceeds expectations,” Salvoni added.

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