Reseller News

Australia, New Zealand consumers happy to dump bad suppliers

  • Len Rust (Unknown Publication)
  • 05 May, 2008 22:00

More than half of the consumers surveyed in a recent 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, 1031 research participants in Australia and New Zealand were asked about their experiences 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 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, organizations 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 percent of respondents indicating they had experienced poor service. Next were ISPs with 52 percent, followed by finance (46 percent), travel and hospitality (31 percent), online retail (30 percent), and insurance and utilities (28 percent).

A high proportion of respondents (65 percent) indicated they had stopped doing business with a telecommunications provider due to poor customer service, and 44 percent believed their provider hadn't realised they were no longer a customer. Other industries also had issues. The travel and hospitality industry appears to suffer from customer visibility problems; 78 percent 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 percent 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 for 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 can."