Businesses in the UK are potentially missing out on millions of pounds of revenue every year by failing to fight for customers who are thinking about switching suppliers, according to new research.
The research, by customer contact centre specialist Echo Managed Services, found that businesses could be missing a trick by failing to empathise and react when a customer contacts them to say they are thinking about switching, with 40% of customers revealing that their supplier made no effort to retain their business and let them leave without a fight.
But the fact that 14% of consumers have been convinced to stay with a business in the past year – whether due to promises of better service or better financial benefits – shows that should businesses put more effort into effective customer retention strategies, the rewards are there.
Consumers have also hit out against the poor customer service experienced during the switching process, including lags in service or delays in credit payments from previous suppliers.
Echo’s research revealed the main frustrations experienced by consumers when they do switch are errors made by suppliers, lack of communication about when services will be switched and unexpected delays to services topping the list of most common problems.
Lack of transparency during the switching process was the main issue for 28% of consumers, while 31% said poor customer service – both by their old and new suppliers – had caused frustrations.
Errors and mistakes during the switching process were an issue for one in five customers, with 17% saying they experienced delays in new services starting, even after their old suppliers had turned their services off.
In fact, just half of customers (50%) who switched a service provider in the last year described the process of smooth and simple. The other half described it as less than perfect, and one in 10 described the switching process as difficult and frustrating.
Commenting on the findings, Chris Cullen, head of sales and marketing at Echo Managed Services, said: “It appears that for many businesses, when a customer contacts them to say they are thinking about leaving, they are failing to empathise with and retain their custom.
“This could be a costly mistake as clearly a significant number of consumers have been convinced to stay with a business when the right effort has been made to retain them.
“Of course, for some customers, this attention could come too late. But businesses that put an increased focus on understanding their customers’ needs, reward loyalty and take a proactive, tailored approach to retention may benefit from a reduction in customer losses. However, there is a balance to be made because for some customers unwanted contact could cause further frustrations.
“Businesses which switch off to customers’ needs during the switching process also risk losing that customer forever when there is actually every chance they might come back at a later date which, considering that most consumers review their supplier on an annual basis, is not impossible.
“Customer retention strategies should focus on trying to satisfy and keep hold of customers at every stage of the business relationship. However for customers who do decide to leave, businesses should still ensure the switching process is made as smooth as possible so that customers leave with a good final impression.”