NEW YORK (MainStreet) Some $5.9 billion of commerce is annually up for grabs globally due to the fact that customers switch from one provider to another, according to a recent study, and millennials are leading the turnover trend.
"The continuously changing customer behavior in the digital market place coupled with lower levels of customer satisfaction have fueled a switching economy," said Robert Wollan, global managing director with Accenture Strategy, Sales & Customer Services.
An Accenture report found that 91% of consumers are frustrated when they have to contact a company multiple times for the same reason, and 85% expressed frustration toward companies that are not easy to do business with.
"The switching economy is fueled by a combination of rising customer expectations, and most companies' inability to keep up, resulting in higher switching rates and poor customer experience," Wollan told MainStreet.
Millennials are heading off the switching economy, because it's not as complicated as it was to change fifteen years ago.
"The barriers for customers to move between providers are coming down, making it easier than ever for customers to switch," said Wollan.
Millennials also want and demand a meaningful seat and voice.
"Millennials are switching more just by the sheer fact that they were never entrenched in the idea or concept of brand identity and brand loyalty as boomers were in the past," said Mary Nemetz, CEO of Tix4Cause.
But turning over too soon can cause consumers to sell themselves short.
"Switching too quickly at times limits the ability to vet a claim on a particular product prior to the switch or the investment in the product," Nemetz told MainStreet. "Consumers should switch when the product they currently use no longer fulfills their needs."
While switching is highest in the U.S. among retailers, cable television, satellite providers and retail banks, most consumers want to stay with a certain provider.
"It requires companies to be more transparent, consistent and responsive to customer's needs," Wollan said.
More than 80% of customers who switched responded that there was something a company could have done to keep them.
"Consumers are demanding more and those companies that listen, stay attuned and consistently deliver stand the best chance of not being switched," Nemetz said.
Regardless of age or reason, switchers matter the most when they move in large numbers.
"Negative publicity and mistreatment of a vocal switcher can trigger an avalanche of switching," said Chevine Anderson, managing partner with Nobility Advisors. "The impact is significant in that a company's marketing and sales figures can be skewed if this group is not given the leverage they desire for loyalty."
Turnover is viewed positively in some cases, because it challenges established monopolies.
"Switching provides more opportunity for people and companies to compete in new industries that before were tightly controlled by the main category leaders in each division," said Nemetz.
As for the impact of switching on the economy, it's causing companies across industries to step up their efforts to provide customer satisfaction and overall better customer experience.
"To achieve meaningful growth, companies will need to stem customer churn and take advantage of new customers looking for new providers by providing a seamless, personalized, exceptional customer experience," said Wollan.
And those new customers represent a $1.3 trillion market of revenues in the U.S. alone.
--Written by Juliette Fairley for MainStreet