Brands fail on service

21 February 2011

NEW YORK: A majority of consumers across the globe switched between service providers last year because their needs were not adequately met, although behaviour is starting to change in this area.

Accenture, the consultancy, surveyed 5,800 people in 17 countries, including Brazil, China, Germany, India, Japan, the UK and US, and reported that 64% of participants switched in 2010.

This marked a decrease measured against the 69% score from 2009. Before then, totals had increased steadily since the 49% low from 2005.

Last year, 26% of interviewees swapped to a new retailer in 2010, figures reaching 22% concerning banks, 19% regarding internet service providers, 17% relating to mobile networks and 16% for landlines.

Indeed, satisfaction ratings fell in all 11 categories assessed, based on problems like not being able to contact company representatives at convenient times to the lack of a multi-channel model for dealing with enquiries.

"The unexpected reversal in switching rates indicates that despite the decline in satisfaction with service, other factors … are influencing consumers' decision to stay with or leave their providers," said Robert Wollan, global managing director, Accenture Customer Relationship Management.

Overall, 67% of the panel were unwilling to compromise on product quality in exchange for cheaper prices, and 54% adopted the same position when discussing customer service.

The number of people that stopped trading with one firm in favour of another on cost grounds dropped from 75% in 2009 to 57% in 2010, suggesting habits encouraged during the downturn may be receding slightly.

A key issue which must be addressed is that of trust, as only 27% of respondents expressed confidence in the organisations they did business with.

Some 18% of contributors changed retail bank due to worries linked to this matter, but other segments were also impacted.

The share of shoppers taking similar action in the consumer goods retail industry rose from 7% to 15% annually.

These amounts stood at 11% and 17% regarding travel and tourism, with electronics registering 17% in 2010, compared with 14% the previous year.

Loyalty programmes, however, grew in popularity, with 52% involved in at least one scheme run by a retailer, a year on year climb of seven percentage points.

Wireless providers saw a double-digit uptick, to 31%, on this metric, and hotels improved by six points, to 24%.

Elsewhere, 54% of those polled stated their fidelity to individual retailers was enhanced by this sort of programme, standing at 53% for mobile phones and 51% for hotels, all increasing during the last 12 months.

Accenture also found technology is playing a greater role, as 77% of customers agreed tools like email ads, web banners, product comparison sites and online ordering proved helpful in the pre-sales phase.

Similarly, 66% thought innovative offering such as automated phone attendants, live internet "chats" and self-service options on websites had made their experience better.

Meanwhile, word of mouth retains the strongest influence on choosing a service provider, and was considered by 76% of the sample, and afforded the highest importance by 56%.

Data sourced from Accenture; additional content by Warc staff