Tuesday, 29 April 2008 10:35

Practice of 'Burn and Churn' Still Alive As Companies Fail To Retain Customers

Poor Customer Experiences Key to Consumers Boycotting Businesses

SYDNEY (29th April, 2008) – More than half of the consumers surveyed in a new customer experience report have ceased buying products and services from a company due to poor customer service and a high number felt that the supplier didn’t know it had lost their business. Only half of the companies aware of the loss of business had attempted to win the business back, the survey found.

In March 2008, 1,031 research participants in Australia and New Zealand were asked about their experience in dealing with companies in the telecommunications, utilities, insurance, online retail, internet service provider (ISP), travel and hospitality, and finance industries. Prepared by StollzNow Research and commissioned by RightNow® Technologies, a provider of on demand customer relationship management (CRM) software solutions, the report’s findings are proof that the impact of a poor customer experience can directly affect a company’s bottom line.

Despite the high cost of customer acquisition relative to customer retention, organisations appear to be content with a proportion of customer churn based on poor customer experiences. Two-thirds of respondents in Australia and New Zealand said they had experienced poor customer service at some time during their relationship with companies in one of the seven targeted industries.

The telecommunications industry was the worst offender with 62% of respondents indicating they had experienced poor service. Next were ISPs with 52%, followed by finance (46%), travel and hospitality (31%), online retail (30%), and insurance and utilities (28%).

A high proportion of respondents (65%) indicated they had stopped doing business with a telecommunications provider due to poor customer service, and 44% believed their provider hadn’t realised they were no longer a customer. Other industries also have issues. The travel and hospitality industry appears to suffer from customer visibility problems; 78% of respondents indicated that once they’d boycotted a company in this sector, the company was unaware of the lost business. This lack of insight may account for the massive 90% of travel and hospitality companies that did not attempt to win customers back.

“Today, the success of every business depends on good customer experiences,” said Brett Waters, Vice President Asia Pacific South, RightNow. “Consumers are much more attuned to what is, and what isn’t, acceptable behaviour when they interact with organisations and are increasingly prepared to remove their business because of poor experiences. Companies need to wise-up to the correlation between poor customer experiences and churn – if you can’t make it easy and satisfying for people to do business with you, you’ll lose them to someone who does – and quickly.”

The survey also investigated consumer opinion about experiences when shopping online. Consumers were asked what they found to be the most frustrating aspects of the experience. Areas for improvement included transparency about delivery charges before reaching the ‘check out’ as well as better information about products and the ability to ask questions during the purchasing process. All of these areas of frustration are solvable with technology readily available today.

Finally, on a lighter note, the survey also found that almost one third of Australians would rather go to the dentist for a tooth extraction than suffer a poor customer experience!

About RightNow Technologies
RightNow (NASDAQ: RNOW) delivers the high-impact technology solutions and services organisations need to cost-efficiently deliver a consistently superior customer experience across their frontline service, sales and marketing touch-points. Approximately 1,800 corporations and government agencies worldwide depend on RightNow to achieve their strategic objectives and better meet the needs of those they serve. RightNow is headquartered in Bozeman, Montana. For more information, please visit www.rightnow.com.

RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of the NASDAQ Stock Market.

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