Unhappy customers are finally making the switch
Irish consumers are no longer prepared to put up with poor customer service – 72 per cent of us now active switchers, according to a new survey
According to the Accenture survey, the customer satisfaction rate is at 31%, down from 36% last year
When it comes to customer disservice, it never ceases to amaze how stupid some companies can be. They spend millions of euro on glossy advertising campaigns and slick marketing and public-relations strategies aimed at convincing us to buy into their brand or service, and then, once we do, they treat us so shabbily we quickly learn to hate them.
For years, companies were able to treat paying customers appallingly because they knew that, no matter what, they would stick with them out of laziness or apathy or because of a perceived lack of options. But times are changing and according to a major new survey that Pricewatch has been given first sight of, Irish consumers are becoming increasingly likely to punish bad customer service by complaining about it on social networks and taking their business elsewhere.
The research, carried out by Accenture and published this morning, shows 72 per cent of consumers are now active switchers – up 11 per cent on last year and much higher than the global average of 54 per cent. What should trouble companies with a bad reputation for service is that two-thirds of customers shifted at least a portion of spend to another provider based on bad service or support.
Is it any wonder Michael O’Leary had a Damascene conversion last year after which he unveiled a new caring, sharing airline? Switching is big business. Accenture estimates the State’s “switching economy” is worth about €13 billion a year.
But while we expect more, companies do not appear to be delivering. The survey shows customer satisfaction has fallen to 31 per cent, compared with 36 per cent in 2013.
Consumers’ willingness to buy more products or services from their providers has fallen to 12 per cent compared with 17 per cent last year, while the number of people who say they are inclined to recommend their providers to their friends has also fallen and is now 18 per cent compared with 22 per cent last year.
When it comes to the switching economy, retailers suffered most last year, with 33 per cent of consumers telling researchers they switched their spending from one shop to another – up 9 per cent on the previous year. The survey found people were next most likely to have switched banks, with 19 per cent of those polled saying they had taken their money elsewhere. This is significantly up on the previous year – although many switchers had no choice after Danske Bank left the Irish market last year.
Overall, poor customer experience is the most common reason for switching, with two-thirds saying that was behind their decision to change provider. A loss of trust in the company was the second most common reason, with 47 per cent saying that was behind their move. A quarter switched due to a lack of customised offers.
The majority of respondents – 86 per cent – told Accenture’s people
they could have been convinced to stay with their original provider had their issues been resolved on first contact.
Accenture defines the “switching economy” as the estimated annual revenue potential at play by consumers switching providers.
“Changing customer behaviours and low levels of customer satisfaction are fuelling a switching economy that presents opportunities for some companies and threats for others; too many companies are playing not to lose instead of playing to win,” says Rebecca Gilmore, head of Accenture customer and marketing services.