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Good Customer Service Is More Important Than Pricing
By Jim Berkowitz
Expert Author
Article Date: 2008-12-15
Here are several excerpts from an article by Barney Beal, News Director with SearchCRM.com, Poor Customer Service, Not Price, is Driving Customer Churn:
The notion that customer service is imperative in a recession got a major boost from a recent study by Accenture.
The New York-based consulting and services firm surveyed more than 4,100 consumers over the summer and found that service - more than price - is a clear differentiator.
According to the online survey, 67% of respondents reported switching companies because of poor customer service, compared with 59% last year. U.S. respondents were even more service sensitive, with 73% reporting that they switched companies owing to poor customer service, compared with 47% switching over lower prices. All indications are that the importance of customer service is only growing. Four years ago, when Accenture first began conducting the annual study, only 48% of respondents said they were switching businesses because of customer service.
"That's a material jump in just one year and from 48% to 67% over four years," said Robert Wollan, global managing director of Accenture's CRM transformation service. "Those are monstrous leaps and trends."
"There may never be a better or more important time to get closer to customer behaviors," Wollan said. "The clues are there."
While a number of factors can have an impact on the customer lifecycle and can get lost in high-level metrics, it's important to understand how individuals or groups are responding to customer service, particularly in a down market.
"The one-size-fits-all experience will do little to differentiate you to your customer base," Wollan said. "Customer expectations tend to be by segment or category or sometimes by individual."
That makes segmenting customers and understanding their touch-points with the business particularly important. Organizations that understand which customer segments make the biggest difference to the bottom line and where to reach them can focus limited dollars on the most effective places, Wollan said.
Meanwhile, consumers are becoming more and more demanding.
Based on the results of the survey, Wollan offers three pieces of advice for organizations seeking to improve customer service initiatives.
- First, organizations should look for insight into the data they already have around customer behavior, which can be quite robust.
- From there, they need to apply that to the customer lifecycle. "It's not just a spot in time, it's looking for a trend to anticipate change and looking deeply at the channel preference among that mix of customers," Wollan said.
- Finally, organizations need to establish their customer service baseline and the diversity of their customer base.
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About the Author:
Jim Berkowitz is a seasoned executive with more than 30 years of professional services and project management experience related to Customer Relationship Management (CRM) and Financial Management (Accounting & ERP) software solutions for small, mid-sized and Fortune 500 companies. As a Sales Force Automation and CRM Consultant, Jim has assisted more then 100 companies with the design and implementation of custom CRM solutions.
Mr. Berkowitz is the founder and President of CRM Mastery, Inc.; a company dedicated to serving small and mid-sized enterprises (SMEs) by offering affordable tools and guidance to help them plan for and succeed with their CRM initiatives.
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