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May 11, 2020
Despite new UK regulations that encourage consumers to save money by changing suppliers, average customer churn increased by only 3.7% versus 2018, according to the 2020 CallMiner Churn Index which was released today. While consumers are showing increased motivation to stay loyal, CallMiner’s study estimates that British businesses still lose £33.4 billion[i] per annum due to overall churn and £4.95 billion[ii] per annum due to unplanned churn.
“Our research found that while UK consumers want to be more loyal and are less price-sensitive than in years past, brands continue to push customers away with poor service.” said Frank Sherlock, VP of International at CallMiner, the leading platform provider of award-winning speech and customer engagement analytics. “We estimate that UK businesses lose nearly £5 billion a year to unplanned churn.”
CallMiner surveyed 2,000 U.K. adults[iii] that have contacted a supplier over the past 12 months to understand what makes them stay loyal or switch. Select research findings include:
“The rise of self-service has made human support even more critical. Now more than ever, when customers call a provider, we expect one of two things: they are already frustrated due to a lack of information and online support, or they have a complex and sensitive issue. Both cases require emotionally intelligent ‘super-agents’ who can connect, solve problems and deliver exceptional service,” said Adam Walton, COO at CallMiner. “Customer service agents are on the front line, managing their own transition to working from home and facing significant new demands for help from customers where they are often the only human interaction between consumers and brands. Equipping agents to satisfy the needs of emotionally charged, and sometimes vulnerable, customers is essential for retention, loyalty and revenue.”
In terms of consumers’ preferred channels for customer support, website- and social media-based support declined 34% and 27%, respectively. Text message-based support grew the most since 2018 (+38%), followed by phone support (+14%).
While the average rate of churn experienced little change, some sectors saw significant increases. The highest churn rate increase of 102% was in the banking sector, which saw the number of customers switching more than double from 12.2% to 24.6%.
For more results and insights – including churn by industry, the most popular customer service channels, and the primary reasons why customers switch providers, download the full report – the 2020 CallMiner Churn index – here.
[i] In the last 12 months 81% of adults have switched an average of 1.98 times. According to the Office of National Statistics there were 52,078,525 adults in the UK in 2018. So, this represents 42.184 million people and 83.53 million switching occasions. A conservative estimate of the cost of acquiring a new customer across all the main sectors in the survey is £400 per person. This is based on the level of incentives applied to attract new customers and a conservative estimate of associated sales and marketing costs. So, at the average cost of £400 the total cost of churn is therefore at least £33.4 billion.
[ii] The CallMiner Churn Index identified that in the last 12 months 81% of adults have switched an average of 1.98 times. The difference between those who are planning to switch and those who switched is 12% of the adult population = 6.25 million people. 6.25 million people switching 1.98 times at £400 per switch = £4.95 billion The total cost of avoidable churn is therefore at least £4.95 billion
[iii] The research was carried out for CallMiner by 3Gem Research & Insights. 2,000 UK adults responded to an online survey in February 2020Back to Press Releases
CallMiner is the global leader in conversation analytics to drive business performance improvement. Powered by artificial intelligence and machine learning, CallMiner delivers the industry’s most comprehensive platform to analyze omnichannel customer interactions at scale, allowing organizations to interpret sentiment and identify patterns to reveal deep understanding from every conversation. By connecting the dots between insights and action, CallMiner enables companies to identify areas of opportunity to drive business improvement, growth and transformational change more effectively than ever before. CallMiner is trusted by the world’s leading organizations across retail, financial services, healthcare and insurance, travel and hospitality, and more.