Two out of three consumers switched companies in 2011, even as their satisfaction with those companies rose, according to new research from Accenture.
Among the 10,000 consumers who took part in the Accenture Global Consumer Survey, those who switched companies for any reason between 2010 and 2011 rose in eight of the 10 industries considered. Wireless phone, cable, and gas/electric utilities providers each experienced the greatest increases in consumer switching, at five percentage points. This includes consumers who switched entirely to another provider as well as those who continued to do business with one provider while adding services from another, which Accenture identifies as a partial switching a new, but growing trend.
Retail banking experienced a 1 percent drop (from 16 percent to 15 percent) in complete switching from 2010 to 2011, yet partial switching was up 3 percent (from 24 percent to 27 percent). Wireless phone companies experienced a 2 percent increase in complete switching (from 19 percent to 21 percent), but when adding in those who made a partial switch, the combined switching rate increased by 5 percent (from 38 percent to 43 percent.
The chief reason for customer switching, according to Robert Wollan, global managing director of Accenture's Customer Relationship Management practice, was that companies failed to deliver on their initial promises to customers.
Not surprisingly, cost was not a factor in switching, Wollan adds, mainly because companies today can respond quickly to changes in pricing and other offers from competitors. "We've seen over the last four years that cost has been less of a determinant for switching," Wollan stresses.
The survey also found that 23 percent of consumers feel very loyal to providers, while 24 percent indicated that they had no loyalty at all. And, only half (49 percent) indicated that they are strongly influenced by loyalty programs.
Perhaps paradoxically, though, participation in loyalty programs is up in virtually every market. "Consumers claim to be less loyal, but they value loyalty programs," Wollan notes.
At the same time, consumer satisfaction with their providers' customer service actually increased in 2011 in 10 attributes measured by the survey. These attributes include the wait time for service (33 percent satisfied compared to 27 percent in 2010), the ability to resolve issues without speaking with an agent (38 percent satisfied compared to 33 percent in 2010) and speaking with just one customer service agent to resolve an issue (39 percent satisfied compared to 32 percent in 2010).
Wollan interprets this data to mean that companies have improved operationally while failing to address the real issues that differentiate themselves. "It'ss great that I don't have to wait on the phone so long, but that's not what's going to keep me as a customer," he says.
The Accenture study identified a number of blind spots in the customer relationship that many companies appear to be overlooking. Most noteworthy among the blind spots identified are the following:
- Organizations are failing to offer consumers opportunities to engage with them, including through digital channels. Consumers expect a multichannel experience, and in fact, 57 percent reported frustration when they were not able to access company information or purchase a product through the channels of their choice. Social media sites have improved overall customer engagement, up from 14 percent in 2010 to 21 percent in 2011. More than a quarter (27 percent) of consumers want companies to interact with them in social media environments even before they are customers, and 24 percent reported greater likelihood of doing business with providers that are actively engaged with social media.
- Companies are overlooking subtle clues that customers are itching to switch. Among those signs, Wollan says customers might change the amount of business they do with a company, especially if the volume drops off or there are other changes in spending patterns.
"As companies tackle these blind spots, building a solid foundation in data, analytics, and research will help clarify the voice of the consumer, making the task of identifying and responding to rapid changes in consumer behavior easier," Wollan says. "Better harnessing customer analytics will help identify key moments of change, competitive threats, and service opportunities and position the organization to more effectively deliver on its brand promise."
Companies should also do more to recognize and reward customers who increase business with them, Wollan says.
But perhaps most important of all, companies need to view retention as a mechanism for growth, Wollan says. "Saving customers is as important as growing new business," he states emphatically.