Do You Care if a Customer is Still YOUR Customer?

  It turns out that 44% of customers who stopped doing business with a teleco company believed the company didn’t even know. (Study by RightNow & StollzNow).  Turns out most of the defection is due to poor customer service, with the following list of industries as the worst offenders (no real surprises here):

  1. telecommunications
  2. ISPs
  3. finance
  4. travel & hospitality
  5. online retail
  6. insurance & utilities 

ARE THEY STILL A CUSTOMER?  It shouldn’t be too hard to figure out if a customer is still yours.  You have a few metrics in place, and you start looking for trends.  You can look for changes in attitudes, as these are often a leading indicator of behavior.  Look at customer survey data for those who score low.  While high satisfaction scores don’t correlate well with customer retention/loyalty, low satisfaction scores do correlate well with customer defection.

It’s best to concentrate on customer behavior data for the real insights.  A few that have served me well in the past include:

  • Changes in RFM (recency, frequency, monetary) patterns
  • Customer service usage – frequency of contact, number of complaints, satisfaction with result of contact.
  • Product or service usage – changes in usage patterns, using most recent version, contract renewals, service usage vs. payment (using much less than what one is paying for may indicate pending defection)

Companies spend signficant dollars on acqusition, yet for many, customer churn rates remain high.  There may be some customers you no longer wish to keep.  That’s fine, but you need to know how to identify the ones to keep and the ones to “let go,” and the metrics above will help. 

WHAT’S MORE PAINFUL?  The study also found that “almost one third of Australians would rather go to the dentist for a tooth extraction than suffer a poor customer experience!”  Either they have some wonderful dentists in Australia, or really poor customer service…

photo credit


One Response

  1. I gave a travel mug as a gift, it was defective so went to get a replacement. I could not believe that without a reciept, which was 1 1/2 hrs away, they would not replace it. It was brand new and yet no!!!! We do ALOT with Starbucks and I have NEVER encountered the response I got there. I WILL NOT buy travel mugs from them ever again. Not replace defective product and we use the same Starbucks for years so they know us there. I purchased it 1 week ago.
    So much for great cusomer service.
    Thanks for your time.

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