Thursday, October 24, 2013

U.S. “Switching Economy” Puts Up To $1.3 Trillion of Revenue Up for Grabs for Companies Offering Superior Customer Experiences

Despite having more data and insights into consumer desires and preferences, companies in the U.S. have failed to meaningfully improve customer satisfaction or reverse rising switching rates among their customers. As a result, there is a potential $1.3 trillion of revenue at play in the U.S. market represented by the “switching economy,” according to new research released by Accenture.

The research revealed that 51 percent of U.S. consumers switched service providers in the past year due to poor customer service experiences, up five percent from 2012. Switching rates were highest among retailers, cable and satellite providers and retail banks – making companies in these sectors the most vulnerable, but also giving them potentially the most to gain.

Accenture’s analysis of consumer spending forecasts and switching rates revealed by the survey shows that $1.3 trillion of revenue is being transferred between companies in the U.S., forming a sizeable “switching economy.” The findings are published along with the ninth annual Accenture Global Consumer Pulse Survey, which measured the experiences of 12,867 customers in 32 countries and across 10 industries to gain insight into the changing dynamics of today’s “nonstop” customers and assess consumer attitudes toward marketing, sales and customer service practices. The survey included 1,256 U.S. customers.

The survey found that customers are increasingly frustrated with the level of services they experience: 91 percent of respondents are frustrated that they have to contact a company multiple times for the same reason; 90 percent by being put on hold for a long time; and 89 percent by having to repeat their issue to multiple representatives. There are also frustrations with marketing and sales practices: 85 percent of customers are frustrated by dealing with a company that does not make it easy to do business with them; 84 percent by companies promising one thing, but delivering another; and 58 percent are frustrated with inconsistent experiences from channel to channel.

While up in some categories, the survey revealed that customer satisfaction levels have generally remained stagnant across industry sectors and overall satisfaction fell by one percent since 2012. Additionally, the rate of loyalty barely budged among U.S. customers, rising just one percent since 2012, and customers’ willingness to recommend a company rose by just two percent.

Against the high percentage of customers reporting they had switched providers in the last year, 81 percent said that the company could have done something differently to prevent them from switching. And, while the survey showed that price still plays an important role in the choice of provider, the customer experience is equally important.


Digital customer demands tailored experiences
The survey reveals 48 percent of U.S. customers use third-party online sources, such as official review sites, and one-quarter (25 percent) use customer reviews and comments from social media sites, to find out information about a company’s products and services. Word-of-mouth, including that shared via social media, continues to be the most important and impactful source of company information across industries and is used by 71 percent of the surveyed customers. In terms of the number of online channels used, 75 percent of respondents now use one or more online channels when researching companies’ products and services and 33 percent use mobile devices to access these online channels.

The gap between the use of digital technologies and the ability of companies to use them to improve customer experiences is highlighted by the survey’s findings that, among the 10 industries covered by the report, none made noticeable progress in providing customers with a tailored experience in 2013. In the utilities industry, only 18 percent of customers agreed their provider offered them a tailored experience. Even in industries, such as hotels and lodging and retail banking that are perceived to be leading in creating more personalized interactions, only 36 percent of customers acknowledge receiving a tailored experience, respectively.

Yet, while social media and online are regarded as important sources of information, one of the greatest frustrations customers have with companies is the perceived risk to privacy. Eighty-two percent of U.S. customers report that they feel companies they buy from cannot be trusted on how they use personal information provided to them.

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