Customer Service Evaluation News 2/11/12

Despite Improvements in Service, Two out of Three Consumers Switched Companies in 2011

Switching rises in eight out of 10 industries; loyalty programs do not wield big influence, Accenture reports.


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).


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