Consumers engaging through digital channels more likely to switch service providers: Study

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Reiterating the importance of personal connect, a recent study finds that consumers who prefer digital engagement channels are more likely to switch their brands or service providers as compared to those who prefer to do business through human interaction channels like through phone or in-store. The study, conducted by Verint Systems Inc in partnership with Opinium Research LLC, adds that 57 percent of consumers across all sectors have been with their service providers for more than three years, and that the customer retention has dropped by 7 percent year from last year.

While 58 percent of those who engage via phone have been with their service providers for more than three years, the percentage stands at 57 percent for those who prefer to go in-store and drops to 49 percent for those who engage digitally.

Across the nine industry sectors surveyed, the study notes that banks have the highest customer retention (73 percent said they have been with the bank for more than three years), followed closely by mobile phone providers (63 percent said they have been with their provider for over three years).

Source: www.verint.com/digital-tipping-point

The study further finds that consumers in India, Mexico, Brazil and the UK are more likely to switch their service providers as opposed to French and Japanese customers. Only 35 percent of Brazilians reported remaining with their providers for more than three years, followed by 46 percent of Indians, 50 percent of Britons and 50 percent of Mexicans. In contrast, Japanese companies had the highest retention rates of all 12 countries surveyed with an average of 64 percent of consumers sticking to their providers for more than three years. French and US companies occupy the second and third spot in terms of customer retention for more than three years, with 60 percent and 55 percent respectively.

Therefore, while digital presence is essential, the study highlights that ‘consumers who have a good customer service experience on the phone or in-store are more likely to behave positively towards a brand than when online.’ These consumers are 38 percent more likely to renew their product or service, even if it isn’t the least expensive option, 27 percent more likely to sign up to an organisation’s loyalty programme and 19 percent more likely to leave a positive review.

Source: www.verint.com/digital-tipping-point
“What’s clear is that a more personal touch in customer service helps drive retention and loyalty. This is a wake-up call for many organisations looking to introduce more digital channels with the aim of reducing costs and improving customer convenience,” notes Rachel Lane, director of customer analytics, Eurpe, the Middle East and Africa, at Verint, in a press statement.