When Lightning Strikes

Earlier this week another freakishly-strong thunderstorm rolled through town, and a great bolt of lightning cracked right above our house.  My adrenaline surged, and so did our electricity – immediately frying most of the electronics devices that were plugged in.  There ensued several days of frantic customer service calls to manufacturers, retailers, and telecom providers.   At one point my husband turned to me, saying, “I wish just one of these people would make my life easier.”  It made me recall some research I did last year (http://bit.ly/mzJhTg) which showed that customers who have a bad service experience are increasingly likely to report it to the company – giving them a chance to make it right.  Percentages vary by industry, with 75% of Internet Service Provider customers reporting their bad experiences, and 70% of phone company customers.  Those industries saw the greatest recent increase in reporting, and after the last week, I can understand why a frustrated customer might keep hammering at a telecom provider, hoping for help.

Across the board, of the 57% of consumers who had a recent bad experience, 66% will report it to the company.  Ultimately, about half will stay and about half will leave.  Why is attrition so high when companies are getting the chance to make it right?  Sadly, companies do so only 33% of the time.  47% of the time companies respond but do not resolve the issue.  20% of the time they do not respond at all.  As you can imagine, attrition is high for those customers who don’t get resolution, and almost certain for those who don’t even get an acknowledgement.

This service gap is not confined to the Telecommunications industries.  Because the thought of those companies is a sore subject at the moment, let’s take a look at the situation in financial services.  About the same number of Banking and Credit Card customers reported a bad experience last year (64%/65%).  But 54% of those credit card complaints were not resolved (12% more than banks), and 21% of customers did not get a response (about the same as banks).  Overall 42% of credit card customers that reported their bad experience still defected afterwards (7% more than banks). Neither industry is doing a stellar job in this area, but in general credit card customers are complaining more, getting less help, and leaving more than banking customers.  Think of the revenue those percentage points represent!

When lightning strikes, customers are giving companies a golden opportunity to save and cement their loyalty.  Why don’t companies respond and resolve?   Before we continue the discussion in another blog, please share your comments.  Are companies not aware, not equipped, or uncaring?  How is your industry addressing this?  Let me know your thoughts, and your best guess for how long it will take until my home electronics are back in working order!

US Customer Attrition After Bad Experience

About Lorena Harris

Lorena Harris has more than 20 years of marketing leadership experience with large business service companies. Her expertise is in designing research-based content marketing programs for brand building and demand generation. Since earning her MBA from Duke, Lorena has built revenue-generating marketing programs for $B+ B2B service companies such as Fiserv, First Data and Vantiv (financial services), ADP (employee benefit services), Convergys (contact center services) and Donnelly (publishing services). More information available on linkedin.com/in/lorenaharris.
This entry was posted in Customer Behavior, Customer Experience, Customer Experience Research, Customer Loyalty, Customer Service and tagged , , , . Bookmark the permalink.

3 Responses to When Lightning Strikes

  1. Rob H. says:

    I think companies have gotten lazy about treating customers and employees right during the recession. They’ve taken a “what are they gonna do about it” attitude. But now customers and employees have more choices. Just read that one-third of employees are planning to change jobs, and under the age of 40, that number is above 40%. Customers are going to start leaving like that, too if companies don’t shape up fast.

  2. As someone who has done a lot of client satisfaction research in the financial services and the events arenas, I can tell you that all customer contact is an opportunity – or can be turned into one. Specifically with regard to complaining customers, there was some research done decades ago that demonstrated that if you get a complaint, the manner in which you fix it can turn that customer into a positive advocate for future business with you. In short: 1) Apologise, apologise, apologise. 2) Fix it on the spot if you can. 3) Take a “no quibbles” approach and replace the product with a new/updated one. 4) Follow up the (hopefully by now rectified) complaint with a letter, summarising what the problem was, how you’ve fixed it, what the client should do if similar problems occur in the future, and say thank you for their business. 5) Probably a good idea to follow up within a month or so to check that the fix is still OK, and to ask them whether they were satisfied with the outcome.

  3. This Ad Age commentary really backs up your blog: http://bit.ly/imsbOt. As B.L. Ochman say, “Only 3 of the Fortune 50 provide a simple phone number on their homepage for customer service… America’s biggest companies don’t make it easy for consumers to call them, despite the fact that… 82% of Americans report that they’ve stopped doing business with companies because of poor customer service. No wonder consumers are frustrated!” This article has the largest comment section for any article I can remember in Ad Age – pretty controversial!

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