Switching suppliers has not only become so habitual that it is costing Asian businesses in countries such as Singapore a massive SGD 568 million every year but it also ranks as the number one "killer" for businesses both big and small.
These findings are excerpts from a fresh study done by enterprise management solutions provider BMC Software. The BMC Churn Index did a study of some 4,000 customers in seven Asia Pacific (AP) countries including Singapore, Hong Kong, China, Japan, South Korea, Australia and New Zealand and uncovered what can only be described as a “switching epidemic”.
According to the data thrown up, 60% of all AP customers have changed suppliers over the past 12 months whilst 84% have switched suppliers have switched at some point.
BMC saw most movement in banks, mobile telephone services and insurance companies in the region.
Chip Salyards, Director of Sales at BMC Software AP, said the key reason for churn in these sectors can be attributed to the increase in pricing—which will always play an important factor-- and service issues such as inadequate response when solving problems, errors with the services and new customers being treated better than existing customers.
The study spotlights IT’s ability to support the availability of customer records, proactive customer service and availability of online self service – all strong influencers of customer loyalty.
75% of customers want call centers to provide access to their service history and 76% want suppliers to proactively communicate service problems and their resolutions. This means that the right customer information needs to be available to frontline staff as and when they need to access it, so they are equipped to provide an acceptable level of service to the customers.
Salyards said that while end-to-end technology systems that helped to quickly identify and resolve problems were important, the real measure of IT’s effectiveness is from the outside in and the level of customer service satisfaction.
This, according to BMC, can be done by managing IT from a business perspective such as orientating IT systems to quickly detect root causes, fix problems and restore IT services which can result in good IT- dependant customer service systems. Another way would be to move IT beyond the production of capacity, devices and associated care-taking management to organizational-wide process automation that improves service responsiveness, quality and reduces cost.
“Companies spend substantial amounts of money attracting new customers while often loosing them because of poor service, an outage of frustrating experience with the help centre… automated service assurance and help desk processes can make a marked difference in the consumer experience and drive greater consumer loyalty,” said Salyards.
BMC also recommends organisations to consider best-practice IT processes such as ITIL (IT Infrastructure Library), automated technology management and develop a shared view of how IT resources can directly support the business.
The study also uncovered a new and powerful issue for service providers – the cost of negative word of mouth especially in today’s Web 2.0 world where personal recommendations have greater influence and reach. |
