The changes companies must make to survive in the ‘switching economy’

A report from Accenture shows Canadian firms aren’t successfully bringing digital, mobile and social channels together, and why it matters

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Accenture omni-channel

A while ago an email landed in my inbox encouraging me to open a new no-fee chequing account. It was from Another Bank, not my current one. Two weeks later, that email is still in my inbox.

Why don’t I just delete it? Because the email is short. It lists all the possible benefits of opening this new account in bullet points. And all I have to do is click on one link to start the application process. It’s tempting because it’s so darn easy.

It’s also a perfect illustration of the ‘switching economy.’ In a nutshell, the same digital technologies that make it so much easier for companies to win new customers also make it that much easier for their existing customers to switch their business elsewhere. It only takes a click or two for a consumer to switch their corporate allegiance today.

In an interview, Berkeley Warburton of Accenture Canada told me she regularly reminds her own clients about this potential downside of digital convenience.

“Ten years ago, changing banks involved an awful lot of paperwork and it was really cumbersome. Now it’s actually much more seamless and easy to move your relationship to another provider. So in simplifying the customer experience and moving it to digital and mobile experiences, my clients are bringing down that (switching) hurdle that once existed,” said Warburton, who is sales and customer service strategy lead at Accenture Canada.

“Companies are actually simplifying their experiences for you as a customer,” she added. “But it’s actually making it easier for customers to churn.”

Accenture takes a look at all this in a new report based on surveys of more than 23,000 consumers (including 1,215 Canadians) worldwide. Here’s a breakdown of some Canadian highlights.

– 52 per cent say they are more likely to switch from one provider to another compared with 10 years ago

– 47 per cent had shifted to another provider within the previous 12 months (up from 40 per cent in last year’s survey)

– 55 per cent have switched due to poor service in at least one industry

Clearly, Canadians are not as steadfastly loyal to brands as they used to be. What factors drive them into the arms of brand competitors? Here are the top three frustrations among Canadians when it comes to customer service.

– having to contact customer service multiple times for the same reason (cited by 89 per cent)

– being put on hold for a long time (86 per cent)

– unfriendly or uninformed service agents (85 per cent)

This suggests better training may be needed for front line customer service agents. But what can a network administrator take away from those numbers?

Perhaps a reminder that all customer service channels – both digital and traditional – must ‘speak’ to one another so clients have a seamless experience without repeating the same questions or complaints over and over. If technology tools can help synchronize digital and traditional channels this way, they’re a worthwhile investment: Accenture says the switching economy is worth $163 billion in Canada annually (a 16 per cent increase since 2010). That’s how much revenue is up for grabs when Canadian consumers make the switcheroo.

Here’s another figure to ponder: only 38 per cent of Canadian consumers ‘strongly agree’ that companies are effectively converging digital, mobile, social and traditional channels. With so many companies using technology like customer relationship management (CRM) software and analytics tools, why aren’t consumer satisfaction rates higher? Accenture suggests companies are still focusing too much on how digital technology can help them rather than their customers.

“Companies need to stop chasing scale and instead work to improve how they interact with customers,” the report states. “(They must) invest to address the customer’s needs, not the organization’s problems.”

With millions of customers like me just a click away from switching brands, that switch in strategic thinking is definitely worth considering.

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