By Neil Stollznow
Here's a scary thought: some of your customers don't like you, and no I don't just mean they are a little bit annoyed.
Why do they stay with you? Some are so jaded that they don't believe they'll get anything better from anyone else, others find the transfer costs (i.e. their time) too onerous and the rest are locked into a contract - a little like consumer gaol.
Now, none of this is a problem so long as you're not working under the misconception that they're with you because they like your product or service, and that they're going to stay after their "contract" expires.
Here's an even scarier thought: some of your ex-customers don't like you, left without telling you, and are actively undoing all the good work your marketing department have been doing for so long.
And the worst part is - you don't know because the same poor customer service that made them leave you in the first place has also failed to provide them with a mechanism to tell you why they're not coming back.
In fact, more than half the consumers we asked earlier in the year (in the RightNow Technologies Customer Service Report) stopped buying a particular service or product because they experienced poor customer service, and even when they had taken the time to tell you they were leaving, only half of you tried to win them back.
Despite the high cost of customer acquisition relative to customer retention, organisations appear to be happy enough to just keep on churning through customers. The problem is especially bad in industries like telecommunications, ISPs, insurance and finance.
Nor are companies offering unique products. Very few (less than 17% in the case of telcos, ISPs, insurance and finance) stay because they feel you offer something different to your competitors.
So what's going on here? We know that churn is unproductive and expensive, everyone talks about lifetime-customer-value, marketers are supposed to have been working for years on unique selling propositions and yet customers are cranky and running away or held hostage?
Is it that managers are rewarded for customer acquisition and not customer retention? Is it that it's too hard to have consistent customer contact when they number hundreds of thousands or millions? Is it the pressure of the market to deliver quarterly returns rather than allowing managers to focus on long-term strategies? Is all the ‘customer focus' stuff just talk?
OK, I should leave you with some good news. The research also showed that two-thirds of customers are happy to deal with an organisation by internet only. This opens the way for cost effective customer relations, but also raises the question of how to use internet in a way that creates a genuine relationship.
With more than 15 years experience in the market research sector, Neil Stollznow is the a former NSW Chair and National Secretary of the Australian Market and Social Research Society (AMSRS), a Qualified Practising Market Researcher (QPMR), and a director of Stollznow Research.
The RightNow Technologies Customer Service Report was conducted in March 2008, featuring 1031 participants from Australia and New Zealand.