How Changing Customer Expectations Affect Churn

19 June, 2019



It’s no surprise to anyone in the contact center industry that customer expectations of service have changed thanks to advancements in technology, such as artificial intelligence, chatbots, and automation.

But those aren’t the only catalysts for change.

In its 2019 Customer Expectations Report, customer service software company Gladly revealed three new trends that are having great effect: consumers care more about the experience than the channel, they want companies to know them and provide personalized service, and they prefer quality in customer service over price.

Experience Over Channel

The report said that today’s consumers are less concerned with how many customer service channels a company has available — they just care about the one they need to use at that moment and the experience between them.

Person Not a Ticket

Consumers want companies to know and understand who they are, not just because it means less repeating of their problem as they pass from channel to channel or agent to agent, but because they place value on being treated as unique individuals. Also, 75 percent of consumers said they would likely make a repeat purchase if a company made personalized recommendations based on their needs and preferences.

Quality Above Cost

Quality of service came in as the second most important factor influencing purchase decisions, just behind the speed of service. Nearly three-quarters of the people surveyed for the report said customer service was an influencing factor in purchase decisions.

How Do These Trends Affect Customer Churn?

Of the nearly 1,500 consumers Gladly surveyed, 84 percent said they would switch after three or fewer poor customer service experiences. Seventeen percent would stop after just one bad experience.

Of those who switched after a negative experience, almost half didn’t tell the company before they left, and of the 63 percent who left for better service, 52 percent did so without giving the company any warning whatsoever.

What Is the Cost of Customer Churn?

Suffice it to say, the loss of a customer costs a lot!

A report from call center technology firm CallMiner estimates the cost of customer churn runs into the billions ($136 billion to be exact). It’s an expense that takes several forms:

New customer acquisition costs. Research firm Forrester says it costs five times more to acquire new customers than it does to keep existing ones and 16 times more to bring a new customer up to the same level as a current one.

Loss of recurring revenue. New customers don’t spend as much as current customers, at least not a first.

Loss of expansion opportunity income. Along with the cost of recurring revenue each year, there’s the potential for loss of upsell opportunities.

Loss of brand credibility. The negative effect of dissatisfied customers telling their family, friends, and social network connection can damage a brand’s credibility in a way that’s hard to gauge financially but is real nonetheless.

[bs_lead]Considering the high cost of customer acquisition, doesn’t it make sense to keep the ones you have? Learn more.[/bs_lead]

What Can Companies Do to Reduce Customer Churn?

While there are many ways your brand can reduce churn, Gladly’s prescription is simple: Give customers what they want.

Related to the three trends mentioned earlier, that translates to:

Zero repeats. When there is a problem, customers want to tell their story one time, not repeat it multiple times;

Personalized service. Customers want to be treated as people rather than a case number or ticket;

Quality service. The quality of service a company provides affects not only how much customers purchase but also how much they are willing to pay.

Outsourcing as a Way to Reduce Churn

Another way to reduce churn: outsource your customer service.

Before you throw your hands in the air and accuse us of turning this post into a sales pitch, please hear me out.

In its report, CallMiner said call centers play a pivotal role in a consumer’s decision to switch or stay loyal… “when it comes to delivering services to keep consumers loyal, call centers top the list.”

Once the ball is in the call center’s court, reducing customer churn becomes everyone’s responsibility. But one group is especially critical when it comes to keeping customers happy and brand loyal: customer service agents.

“Agent engagement is the key to customer retention, and understanding what’s important to the customer,” says Pat Ricken, director of training at Transparent BPO. “Anyone can read a script. It’s how you get agents brought into the products [the company sells] so they experience it with the customer, and when they speak have a connection and empathy with the customer and know what they’re going through.”

A report from NewVoiceMedia, a cloud contact center technology provider, says that 86 percent of customers would do business with a company again if they made a positive emotional connection with a customer service agent.

At Transparent BPO, we understand the power of personal connection. That’s why we train our agents not to concentrate on metrics alone but also on behaviors. We know that if we emphasize the latter, our agents will achieve the former.

To learn how we can provide the high-quality, personalized service across multiple channels your customers expect, call us toll-free at 800-276-5140 or send an email. One of our account managers will respond by the next business day.