New research by CallMiner reveals that US businesses have contributed to a switching epidemic by not valuing customers or listening to them when they have problems. And it’s costing them billions. In fact, a conservative estimate of the price of switching is $136 billion per year. The report titled the CallMiner Index features survey responses from US adults who had contacted a supplier in the last five years and shows that 85% of adults switched suppliers 1.81 times in the last 12 months. The sectors that top the list with highest customer churn in the past 12 months are:
- Communications* companies (51%)
- Banks (20%)
- Property Insurance suppliers (20%)
* Communications includes mobile telephone, broadband and landline telephone.
Breakout reports for each of these top industries is available as well:
New customers valued more than existing ones
The survey shows that consumers feel new customers are treated better than loyal customers and that suppliers are focusing more on acquisition than retention. The top advice consumers provide on how to keep them loyal accentuates their desire to feel valued. However, the strength of feeling about what is the right thing to do is indicated by the fact that 43% more people on average provide this advice than those that switched for the same reason.
|Reason for Switching||Advice to Keep Them Loyal|
|Keep prices the same or better than those for new customers||66%||78%|
|Reward them for renewing their contract||30%||53%|
|Automatically apply new discounts to existing customers||27%||50%|
Failing to listen to problems may encourage consumers to say goodbye
The top two reasons to contact a supplier relate to problems that need resolving. The first reason relates to problems with the service or product (60%) and the second reason to problems with the invoice or bill (57%). Both these issues usually require specialized support from a contact center agent. However, although 40% of consumers said they wanted to be listened to before making a call about a problem, only 23% said they felt they had been listened to after making the call – which may explain why 30% leave frustrated and 24% annoyed, 17% upset and 15% angry!
Aimee Lucas, Vice President and Customer Experience Transformist, at Temkin Group, said: “Our own research shows that call center interactions that were more emotionally negative led to longer calls, more frequent transfers, and lower likelihood of the customer recommending the company. It’s imperative that companies use the available tools to their advantage to identify reasons leading to negative customer experiences and churn and coach their call center staff on the behaviors that create more positive interactions with customers.”
The survey uncovered that consumers want to stay loyal but are ‘forced’ to switch because of bad or ineffective supplier practices. The total planning to switch is just 57%. The three highest churn rates are for the same sectors as last year but are 22% lower on average than last year. For example, 40% say they are planning to switch communications suppliers but 51% did so this year. The fact that the intention to switch rates are lower than actual switching for this year might indicate that churn rates are slowing. But it is more likely to indicate that people want to stay loyal and suppliers do something that triggers the desire to switch. This assessment is supported by other findings in this report – particularly how problems are handled at contact centers.
The importance of valuing your customers and treating them fairly has never been higher. Companies are losing large sums of potential recurring revenue from customer churn that could be avoided. This research shows that contact center programs have an opportunity to make a significant impact in this area by simply listening to customers and making their best effort to solve problems on the first contact.
Read the complete reports here or attend our webinar on November 13th where we will dive into details and how engagement analytics can help reduce churn and increase customer loyalty by listening to your customers. Register today!