Reducing Customer Churn

Reducing Customer Churn

Failing to take a couple of simple steps to proactively serve customers better is contributing heavily to British companies losing a staggering £12bn worth of business every year. That is the conclusion of new research which quantifies the loss to British business against a backdrop of 93%, of more than 2000 consumers questioned, revealing they have changed at least one service in the past year.

While the numbers are large, the company behind the research, NewVoiceMedia, believes the figures also present a positive message. For those proactive companies wanting to reduce churn rates the good news is that although one in two disgruntled customers will leave without any warning, the other half will get in contact to resolve an issue.

The other glimmer of hope comes from the fact that, despite the phenomenal rise of social media, nine in ten customers chose phone and email as the preferred channel for addressing issues. So brands are being given an opportunity to provide a professional, timely response. If this is not provided, though, the warning clear; not only are today’s fickle customers willing and able to switch to a rival at a moment’s notice, they are increasingly taking to social media sites to vent their fury.

This trend is in its infancy, accounting for just 2% of overall complaints but Jonathan Gale, CEO of New Voice Media believes it is set to grow and brands need to handle customer complaints professionally or risk losing a customer as well as friends and peers within their social media circles.

“Companies have an opportunity to put things right for the one in two customers who will email or call to let them know about an issue,” he says.

“It’s more important than ever because brand loyalty is becoming a thing of the past. Previously, people would tell friends about an issue face to face but now they can broadcast complaints to hundreds of friends and followers as well as vent on the brand’s Facebook or Twitter feed. It’s a growing problem still in its infancy and so companies have to realise the stakes in getting customer service wrong are increasing dramatically.”

Positive outcomes

The research showed that good service not only prevents churn it also makes three in four more loyal to the brand and prompts 71% to recommend it to friends. Importantly, nearly half, 44%, reveal they would use a brand offering good service more often in the future and one in three would spend more with the company.

The bug bears for customers are very familiar. Although two in three people are willing to wait up to ten minutes to speak to an advisor, being on hold too long and being passed from one attendant to another while repeating information are the top gripes which will prompt customers to churn.

It is here where Gale maintains that technology can make a massive difference in empowering customer service agents to resolve customer issues. Simply identifying the customer as their call is received, using Caller Line Identification (CLI), can reap huge dividends, for example.

“It’s amazing how many people don’t use CLI to identify the caller so they can get the relevant customer information on the screen as the call comes through,” he says.

“It’s such a simple step but it can allow customer services representatives to immediately pre-empt what the problem might be and save the caller having to repeat themselves. That’s the simple bit. The clever part comes through a call centre platform, such as ours, scouring the web to see what activity the customer has been up to. This will give you a very good idea if they’re about to churn, say if they’ve been looking at rivals’ sites or comparison services.

“A really clever bit of tech we have also allows the representatives to get information on the social media influence the caller holds. This is something companies are just beginning to ask for and it allows them to then consider if they want to prioritise someone with a massive following on Twitter above someone with a smaller audience of peers. It’s a sensitive issue but it’s something companies are now realising the need to at least look at.”

By simply identifying a caller and passing on information about their customer record and any recent activity online that looks like they are about to churn, businesses can start to not only avoid defections but engender loyalty. This can no longer be relied upon, as it could be in the past, but has to be earned through good customer service.

The simplest step in providing this is using technology to identifying incoming callers and collating this with recent online activity. This ensures issues can be pre-empted and resolved in a timely fashion without customers being placed on hold and passed between customer services representatives repeating a problem time and time again.

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Sean Hargrave

Sean Hargrave is a former Sunday Times’ Innovation editor, but is now a freelance journalist working mainly for the Guardian, The Times (Media Planet supplements), New Media Age and Marketing Week. Sean also now has a regular slot with media and marketing publication, The Drum on social media and affiliates.