For the first time in six years, the number of consumers who switched service providers as a result of poor customer service declined in 2010, according to the latest edition of an annual consumer behavior study released by Accenture (NYSE: ACN). This occurred even as consumers continue to expect more from customer service and their satisfaction with customer service has been decreasing. In fact, the study shows that consumer satisfaction is down across the board – in each of the 11 service characteristics survey respondents were asked to rate. Their satisfaction declined in areas ranging from having customer service available at convenient times to being able to access service through multiple channels.
The most recent Accenture Global Consumer Survey found that 64 percent of consumers switched from at least one service provider — a bank, utility or wireless carrier, for example — due to poor customer service in 2010. This reverses a trend identified in previous surveys in which the number of consumers making a switch had steadily risen from a low of 49 percent in 2005 to a high of 69 percent in 2009. In the latest survey, retailers (26 percent) and banks (22 percent) demonstrated the highest rates of consumer defection, followed by Internet service providers (19 percent), wireless carriers (17 percent) and landline providers (16 percent).
The survey, which assessed consumer attitudes toward customer service and marketing and sales practices in 10 industries among more than 5,800 people in 17 countries, also found that more than two-thirds (67 percent) of global consumers are not willing to compromise on levels of product quality in exchange for lower prices and more than half (54 percent) are not willing to compromise on levels of customer service. And, according to the survey, the percentage of consumers who identified price as the reason for selecting a new provider declined from 75 percent in 2009 to 57 percent in 2010.
“As the global economy recovers, we’ve identified some telling shifts in consumer attitudes,” said Robert Wollan, global managing director, Accenture Customer Relationship Management. “The unexpected reversal in switching rates indicates that despite the decline in satisfaction with service, other factors, including loyalty programs and the use of technology, are influencing consumers’ decision to stay with or leave their providers.”
Click through for eight factors affecting customer attitudes and behavior, as identified by Accenture.
Consumers are increasingly demanding, and many companies are not meeting expectations. The widening gap between what consumers expect and what they actually experience will likely hinder companies’ growth, especially in emerging markets.
Customers will likely act on their dissatisfaction…even if they haven’t already. Switching due to dissatisfaction remains considerable and, given growing dissatisfaction rates, current customers may well switch in the future. Additionally, consumers are influenced by a broadening set of factors when deciding to stay or leave a provider.
Trust is emerging as a critical influencer of consumer behavior. Building trust among a company’s customer base represents a large opportunity given the small percentage of respondents who say their providers are “trustworthy”.
The “customer experience” begins before a consumer is actually a customer. Marketing and sales efforts influence whether a prospect becomes a customer and, if so, how well the company meets expectations. All consumer touchpoints should offer consistent, relevant experiences, not just the post-sale customer service experiences.
One-size-fits-all customer service is insufficient. With existing customers, expectations are that companies will provide tailored, meaningful experiences to fit customers’ needs and preferences. Additionally, the “customer experience” may continue after switching occurs, influencing lapsed customers and reinforcing the premise that it is rarely too early or too late to improve the customer experience.
Lower prices are usually not sufficient to offset service and product expectations. Most consumers are not willing to trade off customer service, product options, or product quality in exchange for lower prices. In last year’s research findings, price had greater influence, which may have been impacted by the economic climate. In 2010, price remains a key driver but has decreased in importance compared to other factors.
Technology is an increasingly important enabler of customer service and marketing and sales. Technology has boosted consumers’ experiences, especially when prospecting and much more so in emerging than mature markets. It is imperative for companies to engage their customers in these channels to provide positive experiences and, ultimately, greater satisfaction. Importantly, these newer channels have not replaced other channels but rather added to them, as consumers expect a multi-channel experience.
Social media is the catalyst for convergence of digital channels and mobile devices and is dramatically accelerating the exchange of customer opinions. Word of mouth is a critical factor impacting consumer decisions, which includes exchanges through social media. In addition to switching, dissatisfied customers have the equivalent of a megaphone through social media and digital channels to communicate their frustration to others. Companies need to make conscious decisions about their social media strategies and practices, as ignoring it is not an option.
