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Consumers Will Switch, Not Fight
Poor service increasingly opens the door to churn, as the Internet is perceived to allow a fresh start for customer loyalty.
Posted Dec 22, 2005
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The Internet is making it easier than ever for consumers to research companies' products and services, and to take their business to competitors when expectations are not met, according to a recent study by Accenture. The customer loyalty study, based on a survey of more than 1,000 U.S. consumers, found that the majority of consumers believe that the Internet makes it easier to change service providers.

Sixty-one percent of respondents said the reason for this is that the Internet gives them access to information about companies, their services and their competition online, and 50 percent said it was because the Internet enables them to actually purchase the products or services online.

"It's more important than ever that companies get their customer relationships right, because with the Internet, breaking up is easier to do," says Woody Driggs, managing partner for Accenture's CRM practice. "Businesses that fail to meet customer expectations will likely find that losing disgruntled customers will have ripple effects as [customers] share their experiences with others."

Although this has been true for some industries that have provided Internet solutions for customers for a few years, such as financial services, superior online customer service is becoming so ubiquitous that virtually all companies need to be aware of the relationship between the Internet and customer loyalty, Driggs says. "People's maturity around the Internet is continuing to grow. It's not just about products and technologies any more. There are blogs, ratings, etcetera, which are making people see the Internet in a new light."

While 63 percent of respondents said they would complain directly to a company about a service or product problem, an even greater number, 68 percent, said they would tell family and friends about their negative experiences with those companies, and the same number said they would switch to a competing company following a bad experience.

Because of this, as companies offer products and services online, businesses need to make sure they have technical and other support (inventory, shipping, customer service) to bolster their online sales, Driggs says. "Customer loyalty isn't about the product any more; it's about the service. Companies need to deliver the online customer experience that is consistent with their brands. People's propensity for putting up with poor customer service is getting shorter and shorter."

Related articles:

Customer Loyalty: The Real Payoff

Creating Loyal Employees

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