Posts Tagged crm
Sustaining Customer Relationships in a Diminished Economy
By Tom Polanski, EVP, eBrand Media and eBrand Interactive
When it comes to keeping your best customers, what methods do you use? The fact is, in a sluggish economy, cutting back on purchases and spending is what most consumers do first. Companies, on the other hand, figure they can afford to trim back their sales force, customer service staff, and their marketing budget. Those companies assume, without the support of sound statistical evidence, that they can manage search engine marketing, display advertising, and email retention programs in-house. They think they can handle it all themselves. Numerous case studies indicate otherwise while demonstrating that it is more cost effective and profitable to out-source to companies that specialize in a particular service.
Posted by Tom Polanski in Customer Centric, Tom Polanski, eBrand Interactive, eBrand Media on February 25th, 2010
Its more profitable to keep a customer happy! (Poor customer service costs $83 billion annually)
Genesys, with research firm Greenfield Online and Datamonitor/Ovum analysts, measuring the cost of poor customer service in the U.S., found that enterprises in the U.S. lose an estimated $83 billion each year due to defections and abandoned purchases as a direct result of a poor experience. Nearly two-thirds of consumers said they had ended a relationship due to customer service alone. The survey participants said that when they end a relationship, 61% of the time they take their business to a competitor.
The $83 billion overall cost of poor customer service in the us came from:
* Business abandoned and lost to entire industry, $32.4 billion
* Customer churn and defections within industry, $50.6 billion
Furthermore, the problem has become more complicated as customer interactions move beyond the contact center. According to numerous industry researchers, more than 90% of all transactions initiated over the Web are abandoned before any transaction is completed. And virtually no researchers have accurately measured the value of customer service across communication channels, says the report.
Across 16 key economies (countries), the total loss for poor customer service in US dollars is $338 billion annually or the average value of each customer relationship lost to a competitor or abandoned of $243. In addition, 86.4% of consumers would welcome extended offers or help during self-service transactions.
The biggest losers at the industry level are in cable & satellite TV, financial services, and consumer products. Nearly one quarter of consumers in the US said they abandoned a cable/satellite company in the past year, resulting in over $12 billion in lost revenue. And financial services companies suffered more than $10 billion of losses alone. Industries that were previously safe from competition, such as utilities in deregulated regions, are also feeling the pain, with $1.75 billion in lost revenue.
Posted by eBrand Media Research Department in Customer Centric on February 18th, 2010