March 22, 2013
By Robert Wollan,

A Primer for Preventing Customer Churn

Each year, Accenture surveys thousands of consumers around the world to understand their loyalty and purchasing behaviors. The results of the latest survey are in, and as we have seen in most prior years, the percentage of consumers who switch companies in 10 industries, including wireless, retail, and Internet service, is rising.

Some churn is inevitable. However, this year's research uncovered a disconcerting fact: A staggering 85 percent of the respondents said the companies they walked away from could have prevented the switch.

Consumers are not inherently nomadic; they want to be loyal. But companies' traditional strategies for customer acquisition, loyalty, and retention don't seem to be working. The following checklist—a quick primer for keeping your customers—can help.

Get the basics right. Consumers continue to be frustrated by what should be table stakes in customer service. For example, 65 percent are frustrated when they have to contact customer service multiple times for the same reason. An equal number are "throw-up-your-hands" tired of dealing with unfriendly agents and (to a slightly lesser extent) being put on hold for a long time. If companies can't improve performance in these rudimentary areas, it's unlikely they'll get very far with other, more sophisticated services.

Work as hard at making promises as you do trying to keep promises. Too many customers believe they're not getting what they signed up for: Sixty-three percent noted their frustration when their buying or service experiences differ from what was promised upfront. Seventy-eight percent say they are likely to switch companies as a result. Marketers need to do a better job of setting customer expectations and working with sales and service to ensure expectations are met. When you promise things like "on-time delivery," "no hidden costs," "easy resolution of issues and complaints," and "smooth interaction with service technicians and agents," you need to be clear on what you will deliver.

Up the impact of your Web site. While the corporate Web site has been overshadowed in recent years by the interest in other channels (like social media sites), its prominence and influence is underscored in this year's survey. Seven in 10 consumers said they use a company's Web site to gather information on providers and brands across industries, and 44 percent said such sites are important to their decision-making. A company's Web site is, after word of mouth, the most important channel consumers use during prospecting.

Act on the data your customers give you. Fifty percent of survey respondents said it's extremely important for companies to know their (the customer's) history so they don't have to repeat themselves each time they call. Thirty-one percent want companies to use the information customers have provided to make future interactions more pleasant and efficient. In addition, 54 percent want companies to notice when people do more business with the company. Companies are frequently analyzing customer data, but they need to use that data across marketing, sales, and service so that it is used to improve customer experiences throughout the relationship—in ways that customers notice and value.

Stop optimizing individual channels and start optimizing the compelling combinations customers care about. On average, consumers use five to six channels to learn about and select providers. These channels range from word of mouth to corporate Web sites to in-store displays to online review sites and social media. Yet they use these combinations in very distinct categories—there are "digital consumers," who rely mostly on social media and mobile devices, "do it yourself consumers," who use digital channels and tools, but periodically revert to traditional approaches, and "traditional consumers," who prefer to shop in physical retail stores and speak directly with call center representatives.

Providing an optimized mix of channels is key, but it also is important to ensure smooth alignment across channels: Fifty-one percent of consumers said being exposed to inconsistent treatment across different channels is frustrating. And the majority (60 percent) said they're upset when presented with inconsistent offers through different channels when shopping for the same product or service. Nearly three out of four consumers (74 percent) find it frustrating when, during prospecting, they find out that a company is promising one thing but delivering another.

When confronted with these types of poor marketing and sales experiences, about half of consumers stated they are likely to not even consider the provider or brand, reinforcing how important a consistent and seamless experience is—even long before the browser becomes a buyer.

Leaders need to evaluate how they prioritize improving individual pieces of the business versus better optimizing the connections across their business if they want to keep the customers they already have. The good news is that customers want to give you the chance to keep them, and their money, from looking for someone else. Not paying attention and responding to these clear signals is just begging customers to leave.

Robert Wollan is global managing director of the Accenture Sales & Customer Services practice. He is coauthor of Selling Through Someone Else: How to Use Agile Sales Networks and Partners to Sell More and The Social Media Management Handbook.