Surviving and Thriving in a Switching Economy
If your organization invests millions of dollars every year in the latest tools and practices to engage customers but can't seem to move the needle in satisfaction and loyalty, you're not alone. In fact, you're part of the $1.3 trillion "switching economy" in the United States, comprised of dissatisfied customers who are continually looking for new providers that can better address their changing needs. Globally, that number is estimated at $5.9 trillion, according to Accenture's 2013 Global Consumer Pulse Research, which included more than 12,800 consumers in 32 countries.
Consumers effectively told us that despite companies' efforts, they've made little progress in understanding what consumers want and making it easier for consumers to do business with them. Our research revealed that 51 percent of U.S. consumers and 66 percent of global consumers have switched providers because of poor experiences. Most of the defection in the U.S. has occurred among retailers, retail banks, and cable and satellite providers.
Why are U.S. consumers abandoning their existing providers? Many factors are at play. Consumers are frustrated with having to contact a company multiple times for the same reason (91 percent) or being put on hold for a long time (90 percent). They're tired of repeating their issues to several company reps (89 percent). And they're frustrated by companies that promise one thing but deliver another (84 percent), and by inconsistent experiences across a provider's various channels (58 percent). Overall, an overwhelming majority (85 percent) said they switch providers because companies simply don't make it easy to do business with them.
These figures would be troubling on their own, but they're even more alarming given that companies have not been idle. They've embraced new tools such as social media, analytics, and big data in an effort to know their customers better. But it hasn't worked—mainly because they've been applying these new capabilities to old ways of working. For example, companies are generating and collecting substantial data on their customers, and many have the analytical tools to glean from that data tremendous insights into what customers want and need. Yet few companies take the crucial next step: learning from every customer interaction and tailoring future communications to make them more relevant and meaningful to customers.
There is good news in our study, however. Despite their tendency to switch, consumers are not completely rejecting former providers. In fact, 81 percent of U.S. consumers who switched said their previous provider could have done something, beyond giving a better price, to retain them. In general, that "something" is to seek to deliver a better customer experience. Some of the ways companies can do that are:
1. Tailoring the user experience with more customization and personalization. Use all the data available to you to get to know customers and then, crucially, "show them that you know them."
2. Using technology to provide convenient access to more services that matter to customers. Make it easy for customers to use digital technologies to learn more about your offerings, make purchases, and get customer service.
3. Creating a seamless experience so customers can move easily across any sales channel when and how they want. Don't force today's omnichannel customers to restart an interaction each time they move to a different channel.
4. Asking customers what they want to do differently with mobile solutions, and investing in those services and support capabilities. Take advantage of the inherent power of mobility. Don't use mobile devices to just replicate old ways of interacting.
5. Harnessing social media to gain up-to-the-second insights on customer preferences and gather more usable data to make decisions. Create robust listening posts in the social media channels where your target customers live and express themselves.
With $5.9 trillion globally up for grabs, the switching economy presents a monumental challenge for companies that are ill-equipped to keep pace with today's changing consumers. But for other companies, it represents rich growth opportunities: customers all around the world who are just waiting for a company with compelling offers and an enticing experience to come along and sweep them off their feet.
Robert Wollan is global managing director of the Accenture Sales and Customer Services practice. For more information on the Global Consumer Pulse Research, go to http://www.accenture.com/Microsites/global-consumer-pulse-research/Pages/home.aspx.