With an easy access to faster and better technology, the consumer is getting smarter. Customers are better informed and aware when it comes to buying goods or services. According to the 2013 Global Consumer Pulse Research by Accenture, there is up to USD 5.9 Tn in revenue “at play” globally in 2013 as the empowered consumers choose to switch their product and service providers. Accenture also tells how should the companies alter their customer policies to grab the lion’s share of this amount.
The survey was conducted for 10 different industries across 32 countries, and it was found that 66% of the people switched brands in at least one of ten industries due to poor service in the past year. The companies are clearly going wrong somewhere in their strategy, as they are unable to retain customers in an economy where getting customers itself is hard in the first place.
Due to the fickle nature of global recession, most of the companies are playing safe, they are playing to not to lose rather than to win. They are having a defensive strategy, where they are trying to be at par with their competitors, if not better. Such a plan focuses on minimizing losses and earning short term rewards. Even though this might have worked for some, but now when the consumer has so many options available for everything, it has become a necessity to have an edge over the others. The digital consumer’s role in this switching economy is putting a lot at stake.
The switch leading to the predicted expenditure shift could be complete or partial. In complete switch, the customers totally move their spending from one provider to another, while in partial, they are still in process of doing so, shifting one portion of the time. This is being attributed to increasing global Internet penetration. Where, as the release says, every customer is a digital customer. The survey shows that 89% of consumers now use at least one online channel (company website, review sites, or others) when prospecting, with an average of three digital channels used by consumers across the global sample.
The decision to switch from one company to another is mainly made because of poor customer service and policies provided by the former company. Several online forums provide a platform to the consumers to come together and review the services and companies they are taking. ‘Word-of-mouth, including that shared via social media, continues to be the most important and impactful source of company information across industries according and is used by 71 percent of surveyed customers.’ says Accenture.
The companies which deliver valued customer experiences are utilising the social media element along with 4 other capabilities to have an offensive strategy. An offensive strategy means playing to win, that involves taking calculated risks and having a foresight to see the results those risks will give. Normally such companies focus on 5 core elements, which include:
1. Hyper-relevance: Assure customers that the company is doing all that it can to understand them at a more personal level, including customizing their channel and interaction preferences.
2. Relationships at Scale: Digital gives businesses rich channels to communicate with customers in much more personal ways and manage relationships with customers at scale.
3. Seamless Experience: Integrating information and processes that enable customers to flow easily across different channels.
4. Inherently Mobile: Investing in mobile services and support capabilities that are a quick win with customers, and that help to deliver hyper-relevance and reduce costs.
5. Social Media: Harness social media in order to deliver up-to-the-second customer preferences, greater levels of trust, a mechanism for direct and dynamic interaction and more and more usable data upon which business decisions can be made
This model could be highly effective in order to gain and retain customers. The companies who are playing safe, might be having a perception that they are doing all they could to provide the best services to the customers. But if that were true, then we wouldn’t have been seeing such a fluctuation in the economy.
Customers usually don’t switch their service providers on a whim. Those in emerging markets are more inclined to switch providers due to poor service across all industries, especially within the retail, banking, Internet service provider and wireless phone industries. The first instinct in case of a fault is to contact the customer care service, if that fails then switching becomes a good option.
It is clear from the above demographic that non-resolution of customer issues is a major problem all across the globe. Although, 82% of customers who switched said that the companies could have done something to prevent them from switching, primarily first contact resolution. The second preferred solution was for the companies to contact the customer themselves to discuss how to enhance the customer experience.
Hence all is not lost, there are still several ways to keep a hold on the consumer base, to keep a hold on the revenues. And considering the potential to earn a part from the massive USD 5.9 Bn amount, good customer experience isn’t something a company can afford to ignore now.
Accenture is one of the world’s leading organizations providing management consulting, technology and outsourcing services, with approximately 275,000 employees; offices and operations in over 200 cities in 54 countries; and net revenues of USD 28.6 Bn for fiscal 2013.
To contact the author, write to firstname.lastname@example.org
Category Investments News Social