By Tim Ferguson, 13 February 2007 17:25
NEWS
Poor customer service is the main reason customers choose to switch companies but IT can be used to improve the situation.
New research suggests service issues are more likely to cause customer churn than any other factor, with poor problem-handling the biggest culprit.
Professor Robert East, expert in customer behaviour at Kingston Business School, said companies need to find ways of providing better service. "Technology is often the answer," he said.
Customer-facing technology needs to become more sophisticated to deal with recurrent issues more quickly and solve problems more efficiently, according to East.
He added that businesses need to "focus on technology that actually delivers satisfaction to people".
East said: "[Customer churn] comes down to two things. It's money and it's service."
Peter Armstrong, corporate strategist at software services company, BMC - which commissioned the research - agreed that giving customers access to IT is a good way to reduce churn.
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He said: "[Consumers] hate being kept in the dark about problems."
Insurance, utility and mobile companies suffer from the highest churn rates according to the research.
The findings come from the BMC Churn Index which consisted of surveys with more than 1,000 UK consumers.
Comments
There are 5 comments. Join the discussion
1. misceng
I am actively looking for an alternative to what is now called Virgin media broadband. Reasons:-
1 It is more expensive and slower than other offers.
2 I have too many interruptions.
3 It is expensive to complain about breaks in service.
4 Being slightly deaf I have difficulties with Indian accents.
5 Usually they try to blame my setup.
6 I have yet to be told correctly how to resolve a problem.
7 I usually have to wait hours with no changes to my PC until they realise there is a fault at their end and cure it.
2. Simon
They had to do a survey to find that out ?
I passed the point long ago where my choice of next mobile supplier is based only partly on price and coverage, but more on who I expect to get screwed least painfully by !
Billing issues, customer diservice droids who can only tell you that "your bill adds up, pay up" even when the bill is obviously different to the contracted tariff, systems that decide not to supply you order but don't bother telling you, products that don't do what they say, sales droids that don't know what their products are. These are all part of the colourful life of an average Mobile user !
Having said all that, the only reason I left Virgin mobile was that they didn't do data - other than that they had a service that does what it says, and costs what they say it will cost !
And of course you only have to look at any forum dealing with NTL inmates to see what crap customer service can do for your image !
3. Sarah
Unfortunately, technology seems to be mainly used these days so that companies can "hide" behind it and not "have" to deal with the customers in the real world.
Technology is not the answer to good service. It can help, as it can with solving any business solution, provided it is implemented in a way that allows consumers and users to access the information they need and also allow them to speak to people.
4. Nick Cole
Technology is not the answer. Just good old consideration and courtesy for the customer is all that is needed. CRM systems must be designed from this perspective and tested, tested and tested from the customers perspective.
Has anyone really got an adult and useful answer from Microsoft, HP, Adobe, etc, etc, in the last 5 to 10 years.
These systems are nothing more than a means for marketing departments to justify their status and budgets and at the same time prevent customers speaking to the ivory towers.
5. Craig Boundy
The results of the BMC Churn Index come as no surprise. Poor customer service drives me insane and the findings are further proof that suppliers are continuing to fail consumers in areas that are fundamental to all businesses.
Given the amount of choice customers have today, it amazes me that organisations think that they can inspire loyalty while providing only the bare minimum in service. It's just not good enough.
Designing IT solutions from the customer point of view is a good place to start . Businesses should not be afraid to embrace tools that will enable their front-line staff to build better knowledge and understanding of their customer. However, I believe that delivering a great customer experience is much broader than this.
Great service must be ingrained in the culture of the company and be at the heart of service-business strategies. Yes, businesses need to focus on the right technology but they also need to keep asking the question "is this actually improving our customers' experience? ". Everyone in an organisation needs to have service as the touch point for every decision that they make and every action that they take. The only way to deliver a great service experience is for it to be the life blood of a company, its very reason for existence.