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 (NYSE:ACN)*.
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.
“Changing customer behaviors in the digital marketplace and low levels
of customer satisfaction are fueling a switching economy that presents
opportunities as well as threats. But too many companies are playing not
to lose instead of playing to win in this switching economy,” said Robert
Wollan, global managing director, Accenture Sales & Customer Services.
“Growth is harder to come by in many sectors but the switching economy
presents a source of new, sustainable, profitable growth for companies
that are playing to win and gain market share. To win requires an
aggressive approach that goes beyond implementing technology to creating
genuinely engaging customer experiences that today’s nonstop customers
are seeking but obviously not finding with their current providers.”
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.
“Success in the age of the nonstop customer does not all come down to
digital,” said Kevin Quiring, managing director, North America,
Accenture Sales & Customer Services. “It comes down to how to leverage
the digital and offline worlds in a seamlessly integrated way, giving
customers the ability to define their own experience and maximize
control over how they interact with companies. That control extends to
their personal information and how companies balance creative use of
digital applications with privacy and data security.”
The report found that companies that delivered valued customer
experiences exhibited five common high impact capabilities, known as the
customer-driven digital blueprint. These capabilities include:
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Hyper-relevance: Show customers the company learns from every
interaction and applies it at a more personal level, including
customizing their channel and interaction preferences, so customers
don’t have to repeat themselves or hit unnecessary roadblocks. This
means using predictive analytics to provide a more tailored customer
experience with more customization and personalization.
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Relationships at Scale: Digital gives businesses rich channels through
which to communicate with customers in much more personal ways and
manage relationships with customers at scale. Use digital to bring the
intimacy of the corner store to all customers and then give them more
convenient access and more tailored services that matter to them.
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Seamless Experience: Creating a seamless experience requires a
multi-channel approach. Integrate information and processes that
enable customers to flow easily across different channels when and how
they choose.
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Inherently Mobile: Learn from customers about what they want to do
differently with mobile, and invest in mobile services and support
capabilities that stand out to customers.
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Naturally Social: 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.
About the Survey
The Accenture Global Consumer Survey is an annual research project that
assesses customer attitudes toward marketing, sales and customer service
practices and customers’ behaviors in response to companies’ practices.
The 2013 survey includes online responses from more than 12,000
customers in 32 countries: Argentina, Australia, Belgium, Brazil,
Canada, Chile, China, Czech Republic, Denmark, Finland, France, Germany,
India, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, the
Netherlands, Norway, the Philippines, Russia, Singapore, South Africa,
South Korea, Spain, Sweden, Turkey, the United Arab Emirates, the United
Kingdom and the United States. Respondents were asked to assess their
experiences with up to four companies in 10 industries: hotels &
lodging, property & casualty insurance providers, consumer goods
retailers, consumer electronics manufacturers, retail banking, internet
service providers, cable & satellite service providers, landline phone
companies, wireless phone companies and gas & electric utilities.
*About the “Switching Economy”
Accenture’s “Switching Economy” comprises the revenue potential at play,
driven by consumer switching. It calculates the potential expenditure
shift resulting from customers that switched from one provider to
another (“complete switch”) as well as those that will potentially do so
as they started to take portions of their spending to new providers
(“partial switch”).
The size of the Switching Economy is estimated based on two data sources:
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Accenture’s analysis externally sourced data ranges on consumer
spending (2013 forecasts) across utilities, communications, financial
services, insurance, consumer goods retailing, consumer electronics
and hotels & lodging in 32 countries (those included in Accenture’s
survey).
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Switching data from Accenture’s 2013 Global Consumer Pulse Research.
For more information:
About Accenture
Accenture is a global management consulting, technology services and
outsourcing company, with approximately 275,000 people serving clients
in more than 120 countries. Combining unparalleled experience,
comprehensive capabilities across all industries and business functions,
and extensive research on the world’s most successful companies,
Accenture collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page
is www.accenture.com.
Copyright Business Wire 2013