Customer attrition costing firms billionsby
Another day, another study revealing the shocking cost of poor customer service. This time it's Oxford Brookes University delivering the damning verdict on our service standards, after interviewing more than 2,000 people.
Its survey suggests that three out of four people have switched at least one product or service in the last two years due to poor service. And the University's Professor Merlin Stone estimates that if the study is reflective of the entire population, firms could have lost up to 20 million good customers, costing them around £3.39 billion..
More than one in five people blamed poor customer service for switching to other firms in areas including finance, telecoms and utilities.
Lifestyle firm WhiteConcierge, which commissioned the study, said the findings suggested that more than 30 consumers were signing up with different companies every minute of the day.
The report found that the worst affected sectors for losing customers over the past two years were motor insurance, electricity and home insurance.
"Organisations have to work harder than ever to keep their best customers. Consumers have become increasingly demanding and discerning, and with the rise of price comparison websites for example, it is now much easier to compare and switch products."
Jonathan Breeze, managing director of WhiteConcierge, said: "Price is undoubtedly one important factor for causing people to change providers but many companies cannot compete on this at the moment. As our research findings show, issues surrounding customer service experiences are also key and can be addressed more readily."
The findings have come as no surprise to the CRM community. “In the recent tough economic times, service may have been one of the many cutbacks made across the breadth of the organisation. However, service is precisely what will keep current customers and continue to attract new ones," said Matt Fisher, director of FrontRange Solutions.
"Much has been made of the birth of 'Generation Y'-ers – those who multi-task throughout life and communicate with organisations via a multitude of channels. This should strongly underline the need for businesses to reassess their service provision. This young demographic’s demand is for more, not less, personalised and tailored services, fully utilising technology to deliver robust services. Organisations that are providing and delivering robust services win; there is no second place."
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.