Poor IT fault resolution and a failure to tailor IT-enabled business services to meet customer requirements are contributing directly to the high rate of customer churn experienced by many companies, according to new research out today.
The study from IT management software specialist BMC, called the Churn Index, revealed that UK consumers now switch an average of two suppliers a year, with insurance providers the most likely to suffer from fickle customers.
Poor call centre practices and systems, a failure to personalise fault resolution processes, and a refusal to offer the same benefits to existing customers as new customers were identified as the key factors driving this high rate of churn.
The report also found that weak handling of customer problems and a failure to let them know what was being done to resolve issues was the best predictor of churn, with 81 percent of the 1,000 consumers surveyed claiming they would remain loyal to a company if it proactively informed them about what was being done to resolve service problems.
Peter Armstrong, corporate strategist at BMC, said the research highlighted the need for IT directors to focus more on improving customer service. "The lesson for IT directors is that IT needs to be measuring itself from the outside in, not the inside out," he said. "You need to think about services from a customer point of view. A lot of firms will just monitor if their servers are up and running but won't track service availability from the customer point of view."
He added that investing in online customer self service, incident management software capable of tracking root causes and reducing the overall number of problems, and information management systems that ensure call centre agents have real-time access to customer information can help reduce customer churn.
"I hate calling a call centre and having them ask several times who I am and what the problem is, and our research found that that was one of the main drivers for churn," he said. "With the technologies now available there is no excuse for it anymore, when you've got information from a customer once you should never have to ask for it again."
Professor Robert East, an expert on consumer behaviour at London University’s Kingston Business School, said that deploying IT systems to enhance customer service could prove expensive, but he argued that it was worth it in the long run. "The natural state of consumers is one of inertia," he argued. "They don’t want to move and if you can develop a way of handling customers that keeps them happy you will slash the churn rate."
