Bad service costing firms customers and cash

Customers are likely to switch to other firms because of poor customer service – costing companies billions of pounds.

Research carried out by Professor Merlin Stone, of Oxford Brookes University, found firms had lost as many 20 million customers, costing them £3.4bn, over the last two years.

The survey of 2,000 people, found that three out of four switched at least one product or service. More than one in five people blamed poor customer service for switching to other firms.

Lifestyle firm WhiteConcierge, which commissioned the study, said the findings suggest that more than 30 consumers are signing up with different companies every minute of the day.

The worst affected sectors for losing customers were motor insurance, electricity and home insurance, according to the report.

Prof Stone said: "Organisations have to work harder than ever to keep their best customers. Consumers have become increasingly demanding and discerning, and with the rise of price comparison websites for example, it is now much easier to compare and switch products."

Matt Fisher, director at FrontRange Solutions, an IT service management company, said: "In the recent tough economic times, service may have been one of the many cutbacks made across the breadth of the organisation. However, service is precisely what will keep current customers and continue to attract new ones.

"When emerging from a downturn, it is essential to capitalise on any sort of competitive edge by instilling the ability to receive feedback and take tangible, proactive action to meet customers demand."

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