Brands failing loyalty test

02 February 2012

NEW YORK: Over 60% of consumers around the world switched to a different brand last year as a result of receiving disappointing customer service, according to a report.

Accenture, the consultancy, surveyed 10,000 people in 27 countries regarding their experiences across ten different industries, and found that 66% had changed brands after being let down by a company.

This compared with 64% in 2010, but was lower than the 69% who said the same in 2009. Despite the increase in switching indicated by the latest survey, only 44% of those polled said their service expectations had increased in 2011.

Moreover, just 23% of participants described themselves as "very loyal" to the organisations enjoying their custom at present, whereas 24% "had no loyalty at all".

The most important factors shaping such relationships included having knowledge and informed employees, staff who were polite and friendly, and speaking to representatives that can deal with issues personally, Accenture said.

Elsewhere, 49% of respondents were strongly influenced by at least one loyalty scheme. Retailers and mobile telecoms firm had the highest success rate, as 57% of the sample saw these programmes as impacting their choices.

Some 35% of shoppers had also engaged in "partial switching" – not abandoning a brand but starting to buy products from a rival alongside it – when discussing consumer goods retailers, standing at 32% for electronics.

Figures here reached 30% in the travel and tourism sector, 27% concerning retail banking and financial services, 22% for wireless phone companies and 21% for life insurance providers.

Social media is now playing a more central role, as 32% of adults "tend to trust" comments about firms and brands posted by people they know on such sites, up by five percentage points year on year.

More specifically, 29% of the panel said that positive feedback on sites like Facebook and Twitter contributed to their purchase decision, and 28% said the same for negative remarks.

Another 76% of interviewees agreed the increasing use of technology in marketing and sales had "improved their experience" when it came to becoming aware of, considering and picking products, hitting 78% for customer service.

But a majority (57%) had also previously been left "frustrated" after encountering difficulties in accessing information or buying something via their preferred channel.

"Companies that are not engaging with consumers digitally, as part of a multi-channel experience, are letting significant drivers of loyalty go untapped," said Brian Whipple, global managing director at Accenture Interactive.

Data sourced from Accenture; additional content by Warc staff