Category: Customer Retention

Trust Key Factor in Why Consumers Switch Providers

Trust is emerging as a critical influencer of consumer behavior.

Only one in four consumers reportedly trust the companies with which they do business, according to the latest Accenture Global Consumer Research study.

And, over the past year, loss of trust has increased as one of the key reasons behind consumers deciding to change providers in the consumer electronics, retail and tourism industries.

According to the authors of the report, “trust is emerging as a critical influencer of consumer behavior.” In eight of the 10 industries surveyed,  13% to 17% of the respondents mentioned trust as one of the reasons for switching service providers.

The five least trusted industries, in which at least 20% of consumers “do not trust at all,” were  (in order): gas & electric utilities, cable and satellite companies, landline phone companies, wireless phone companies, and life insurance providers.

Not a single industry is trusted “very well” by more than one-third of its customers, and none of the 10 industries surveyed had higher “trust very well” scores  than a year earlier.

The sixth annual Accenture Global Consumer Survey was conducted in 17 countries, with over 5,800 respondents being asked about their attitudes and behavior towards 10 key industries. For more details on these survey results, see the Keeping Good Customers Blog.

Other surveys reflect similar trends in the trust gap between consumers and business. We wrote a three-part series on these declines about a year ago in the Monday Morning Marketing Memo (send me a note if you would like me to send these three articles to you.)

The declining levels of trust across the globe in businesses and governments dictates that organizational leaders need to focus on regenerating trust with key stakeholders and constituencies. 

This is more than just a marketing problem; it needs to rapidly become a Boardroom concern before it becomes a Boardroom problem of epic proportion.

On the other hand, building trust with consumers and your customer base is definitely a strategic marketing opportunity, since so few consumers find their service providers trustworthy.

What are your thoughts on how businesses can re-build trust with consumers?

6 Key Attributes of Customer Centric Corporate Culture

Building a Customer Centric Corporate Culture

The key theme of last week’s Monday Morning Marketing Memo on Sustaining Competitive Advantage was the importance of a customer centric corporate culture in sustaining competitive advantage.Many readers wrote during the week to ask, “what are the elements of a customer centric corporate culture?” I believe the six key attributes of a customer centric corporate culture are:

1. Actively engaging with customers on an individual basis to understand their individual wants, needs, desires, likes and dislikes.
2. Systematically recording, analyzing and sharing customer feedback throughout the organization.
3. Placing greater emphasis on customer retention than new customer acquisition.
4. A dedication to continuous customer service improvement, including learning from mistakes and sharing such lessons throughout the organization.
5. Empowering employees to make on-the-spot decisions that enable value-added and customized customer experiences to occur.
6. Uses policies as guidelines for customer interactions rather than firm rules.


When Lew Platt was CEO at Hewlett-Packard he urged his employees to “create customer intensity everywhere.”
Customer intensity should be the core of any customer-focused organization.

Sadly, there are too many senior executives more willing to talk about how they are cutting costs than about the steps their organisations are taking to better understand the changing wants, needs, and desires of customers.

Rare is the executive who claims “we are going to be successful and grow our business because we are listening to our customers and aligning our future products and services with their future needs.”

Fortunately, such executives are only rare, not yet extinct.


7 C’s of Customer Retention

Seven Common Customer Expectations for Customer Service

While all customers are unique, and use different values to make purchasing decisions, there are seven common customer expectations for customer service, which I call the 7 C’s of Customer Retention:

Caring Attitude — employees that are caring, friendly, helpful, exhibit empathy, shows each customer they are valued, apologizes for company errors.

Customized Practices — flexibility in applying company policies, simple documentation for account opening, forms that are easy to understand and use, suspension of disputed charges, willingness to extend additional services, ability of employees at all key contact points to know and understand the customer’s relationship with the organization. 

Competent Customer Contact Personnel — staff who communicate well and accurately, take action, meet commitments, keep customers informed of status, are fully aware of all the organization’s products, services, procedures, and policies.

Call/Visit Once — the customer’s initial contact person handles the problem, or gets it resolved. This person makes necessary decisions and the customer only needs to explain their problem once (even if moved to another service provider). All contacts know the customer’s account status, as well as the nature of the problem under resolution.

Convenient Access — your operating hours of stores, branches, outlets, offices, and call centers are structured with the needs of your customers in mind. Your access numbers are easy to get through, are answered promptly, and the length of time on hold and the number of transfers internally before the problem is resolved are kept to a minimum. Your web site is easy to understand, navigate, use, and the ordering process online is simple and caters for international orders (if you are willing to ship goods and products outside your home country).

Compressed Cycle Times — customers receive an immediate response to enquiries, products and services meet customers’ timing requirements, adjustments or changes to account details (such as address changes or billing corrections) are made before the next billing or statementing cycle, and your organization provides consistently quick turnaround (especially for problem resolution).

Committed Follow Through — the customer’s initial contact person commits to what/when/how, follows up to confirm actions being taken, checks on customer’s satisfaction level with these steps, and your organization takes corrective action to prevent reoccurrence of an error or problem.

These 7 C’s of Customer Retention are the minimum requirements your customers have. If you do not deliver well against these criteria, you cannot expect to have high levels of customer satisfaction, customer loyalty, or customer retention.

We have a handy 7 C’s of Customer Retention Checklist we use with our clients that we can email to you. Just leave a comment below or send an email to

Are Satisfied Customers Loyal Customers?

Customer Retention Requires More Than Satisfying Customers

It takes more than mere customer satisfaction to retain loyal customers.

As we have pointed out frequently in the Monday Morning Marketing Memo, there is a huge difference in customer retention rates between Fully Satisfied customers and merely Satisfied customers.

This has been re-confirmed in the latest Market Force Information survey of bank customers in the United States. Released last week, this survey 2800 respondents reports that customers who are Very Satisfied are three times more likely to remain loyal than customers who view their banking experiences as just satisfactory.

I am often asked if there is a direct correlation between fully satisfied customers and customer loyalty. This survey confirms my firm belief that there is such a correlation. An amazing 98.5% of those indicating they were fully satisfied with their banks also proclaimed their continued loyalty to these service providers.

Not surprisingly, the survey also showed that 10% of customers have switched banking providers in the past year. The top three reasons for this customer attrition were:

  1. Not being happy with the service (32.4%)
  2. The bank implement new fees/rules that had an adverse affect (29.5%)
  3. Wanting better return on their money (27.2%)

As you can see, it takes more than just customer satisfaction to create customer loyalty.

Service Recovery Crucial for Customer Retention

Service problems are bound to happen. How do you keep customer service errors turning into lost customers?

The most important factor is trust. According to the American Express Global Customer Service Barometer of 12,000 consumers in 12 countries, 70% of customers state they are willing to give companies a second chance after a bad service experience if there has been a history of previously received good customer service.

Even without a history of prior service excellence, up to 75% of consumers will still put up with two or more customer service experiences before taking their business elsewhere. As we noted previously, this tendency for consumers to give second chances to poor service providers was remarkably strong across all 12 markets surveyed.

What should you do when your employees create a bad service experience for customers? Two key service recover points stand out in this survey:

1) Over half (52%) of customers expect something in return after a poor customer service experience, above and beyond resolution of the problem they have encountered.

2) The vast majority of customers (over 63% in all but one market) want an apology, while roughly half want a credit to their account or some form of reimbursement such as a discount, coupon, or the provision of free products and services.

Providing rewards points was an unattractive compensation option chosen by less than one-third of respondents in each market.

Significantly, 70% indicated a discount would motivate them to return after a poor customer service experience, but this can be a costly way to retain their business. While the average discount that would motivate returning business was low in Japan (7%), it was a hefty 19% to 23% in nine markets.

A more cost effective way to maintain customer loyalty and ensure customer retention would be to simply create a series of positive customer experiences. That beats having to buy repeat business through discounts and free offers any day.

Read our most recent Monday Morning Marketing Memo newsletters for more thoughts on Customer Retention Marketing, or what I call the art of keeping good customers.

Consumers Give Second Chances to Poor Service Providers

Most consumers are forgiving and tolerant of a single poor customer service experience, according to findings of the American Express Global Customer Service Barometer.


According to the results of this 12-country study of more than 12,000 consumers, between 50% and 75% of consumers will put up with two or more poor customer service experiences before discontinuing business with a company. This ranges from a low of 49% in France to a remarkably high 77% in India.


Of course, those of us who have visited India are well aware of the infrastructure problems that often lead to bad customer service situations, so perhaps it is not so surprising that Indian consumers are more understanding and forgiving.


There is no doubt that consumers stop purchasing from companies that give them poor customer service. As we noted in yesterday’s blog post, up to 87% of consumers have vowed never to do business again with specific companies due to poor customer service experiences.


Over one-third of consumers in France (38%), Germany (33%), and the UK (33%) are unwilling to forgive even a single episode of poor customer service and are more prone to quit doing business with an organization after just one bad experience.


On the other hand, consumers in India (38%), Mexico (28%), Spain (24%) and Italy (22%) are more inclined to give companies three or more tries.


Significantly, 70% of consumers in this study claimed they will allow an organization a second chance after a poor customer service experience if they have generally had a history of good customer service from that company.


Consumers in Mexico (89%), Canada (88%), the U.S., Australia, and India (86% each) are significantly more likely to include prior service experiences in deciding whether to keep or drop their relationships with selling organizations.


This study confirms what we often tell our clients and workshop participants — creating a series of positive customer experiences is one of the best ways to ensure customer retention.


Read our most recent Monday Morning Marketing Memos for more thoughts on Customer Retention Marketing, or what I call the art of keeping good customers.

Up to 87% of consumers will leave due to poor service

Over eight of every ten consumers in six major markets have vowed never to do business with specific companies due to a poor customer service experience.

Consumers in Mexico, Australia, and Canada are the most likely to walk away and find other service providers when receiving poor or bad service, followed closely by consumers in Spain, the United States and the United Kingdom.

These findings come from the American Express Global Customer Service Barometer, a 12 country study of attitudes and preferences toward customer service released earlier this month.

At a minimum, across all 12 markets, six in ten consumers report they have decided never to do business with a company as a result of a poor customer service experience. The specific findings were:

Mexico — 87%

Australia — 86%

Canada — 85%

Spain — 82%

United States — 81%

United Kingdom — 80%

Germany — 77%

India — 77%

France — 76%

Italy — 73%

Netherlands — 62%

Japan — 61%

This research study was conducted with over 1000 adults 18+ in each of the 12 countries between mid April and early May this year.

Telstra Backflips on Fee for Paying Bills

Telstra, Australia’s largest telecommunications provider, has withdrawn a controversial A$2.20 fee imposed in September for customer payments made over-the-counter or by mail for monthly phone bills.

“This decision has been taken because it is the right thing to do by our customers,” a Telstra spokesman said. Telstra CEO David Thodey announced the decision to cancel the deeply unpopular fee at the company’s annual general meeting last week.

In our Monday Morning Marketing Memo dated 7 September, we wrote “If Mr. Thodey and his colleagues at Telstra are truly serious about improving customer satisfaction across the company, they need to have a serious look at the fees and surcharges that are not only driving customers crazy, but are also driving customers like me away.”

It appears that the senior management of Telstra has listened to customers like me, who spoke out vociferously against the imposition of this new fee, particularly at a time when Telstra’s corporate reputation and customer service levels are both being hammered.

One leading journalist in Australia referred to “the friendless Telstra” in an article last month, while the headline in an article last week read “Telstra arrogance towards customers exposed as Thodey moves on admin fee.”

As Mr. Thodey told the Telstra annual meeting audience, “We tried to impose this charge without first listening to the people it would affect.” He also admitted that the payment fee has caused customers to defect. [Nothing surprising in that!]

Removing this fee is a major first step in renewing customer preference for the Telstra brand. Hopefully Telstra has learned a great lesson about the need to listen to customers and engage its customer base in a proactive, two-way dialogue.

The other critical lesson here is the need for Marketing to have a presence in the Corporate Boardroom. Telstra’s Board is stocked with lawyers, accountants, financial managers and technical experts. Someone with a marketing focus could have easily advised the Telstra Board that this payment fee was not going to be readily accepted by the company’s customer base.

Is Brand Loyalty BS?

Brand loyalty is still alive, though declining, at the supermarket according to a survey just conducted by Tim Manners and The Hub Magazine.
Most interestingly, this survey was conducted online with over marketing 200 practitioners, who reported that their loyalty for ten or more brands has dropped in the past year from 61% to 54%.

Over half the 200 respondents claimed that there is such a thing as brand loyalty, even if their own loyalty buying habits have changed in the past year. Another 31% said their loyalties had remained unchanged. Only 9% of these marketing professionals said there was no such thing as brand loyalty.

Surprisingly, the split in loyalty between brands and supermarkets was almost equal, with 45.8% saying they are generally more loyal to the supermarkets where they shopped and 54.2% agreeing they are generally more loyal to the brands they purchased than to the stores where these are bought.

The key factors in supermarket store loyalty would appear to be convenience and seeking savings from sales, based on the comments submitted by a quarter of those who took part in the survey.

Most interestingly, almost two-thirds of the respondents (64%) said that their supermarkets’ loyalty or charge card program did not make them more loyal to the store. In fact, some indicated that these so-called loyalty programs infuriated them and caused them to shop elsewhere.

In terms of category responses, 68% said that they usually purchase more than one breakfast cereal brand and more than one bread brand. What isn’t clear from the responses is whether these purchases are due to the different likes of household family members (which could indicate strong brand loyalty to multiple brands) or if these purchases are a sign of little entrenched brand loyalty in these two categories.

For instance, in my household, we regularly purchase four breakfast cereal brands, due to different taste buds between our adult members and our two teenage boys. However, as we almost always purchase the same four breakfast cereal brands, ours would be a very brand loyal family for this category, albeit across four different brands.

Speaking of brand loyalty, is there such a thing according to these marketing professionals? Not surprisingly, they feel there is. A full 85% responded “no” to the question “is brand loyalty BS.”

However, the current state of play in loyalty may be best summed up by one respondent who wrote regarding brand loyalty:  “for certain brands and categories yes, for the vast majority no.”

Brand loyalty may not be dead, but it is certainly being applied to fewer brands and fewer product categories.

Of the 200+ respondents to this online survey, 30% were from consulting and marketing services firms, 16% from agencies and four percent from media.  The remainder were from manufacturers, the service industry, academia, and a handful of other industries. Over half (55%) of the respondents have more than 15 years in marketing, with another 17% having 10 to 15 years of marketing experience.

A full report of these survey results is promised for the November issue of The Hub Magazine, which will be devoted to the subject of loyalty.

Here’s a questions I hope Tim and his team cover: if marketing professionals, such as the ones in this survey, have declining brand loyalty despite their firm beliefs in the concept of brand loyalty, how can we expect the general consumer and populace to become more brand loyal?

After all, if marketing people do not “walk the talk” about brand loyalty in their own purchasing patterns, do we really expect the general public to listen to our marketing messages and “do as we say, not as we do?”

Slapping on the Fees

As a result of our previous post on Eliminate Stupid Rules & Fees, we were interviewed by Phil Dobbie recently for a BNET podcast.

You can listen here to the discussion in which I warn companies against slapping on fees to drive new revenue sources as I believe doing so risks increased customer churn and reductions in overall spend. Finding new ways to add fees to customers is a critical mistake made by inexperienced marketers.

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