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:
- 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.
- 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.
- 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.
- 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.
- 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 “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:
- 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).
- Switching data from Accenture’s 2013 Global Consumer Pulse Research.
- Visit the Accenture Global Consumer Survey
- Download the Accenture Global Consumer Survey report
- Download the Accenture Global Consumer Survey Key Findings