In December 2012, I wrote a blog post about the need to exceed your customer’s expectations. Since then, I have studied a lot about customer experience (CX) and its impact on business results. To that end, I recently read a very insightful Accenture article that presents actual data that sheds additional light on my previous article.
Summary of my original article
From 30,000 feet up, my article said that a customer who is only satisfied is likely to move to another vendor if she got a better offer. Also, since expectations are always increasing, you must continue to perform better for your customers because what was good 6-months ago is now just so-so.
Summary of the Accenture article
In May 2014, Accenture conducted a global survey of property & casualty insurers. These people already knew that the customer’s experiences during the claim handling process were the defining moment for the customers. They work very hard to provide a stress-free experience.
Note: The following three figures are from Accenture’s Claims Customer Survey, 2014
Here is the profile of the survey respondents:
As we can see, this is a non-trivial survey!
This graphic shows overall satisfaction and likelihood of switching insurance providers.
We can see that 67% are satisfied and 26% are very satisfied while 5% are very likely to switch providers and 25% are quite likely to switch. In other words, 93% of customers are at least satisfied yet 30% are likely to defect. Sounds strange, right?
Now, lets get a better understanding of the relationship of satisfaction and likelihood of switching:
First, we can see that twice as many claimers are likely to switch than non-claimers. This means that the very action of using the most important service the insurer provides will significantly encourage clients to seriously think about switching.
Second, we see that dissatisfied customers are 1.5 times as like to switch as satisfied customers, but still 39% of satisfied customers are still likely to switch.
Customers are getting more fickle, independent, or stressed out with supplier interactions. We find fault in all interactions and, worst of all, actually believe that another supplier will be better than our current one. In other words, the grass is always greener…. And we are saying less often than before, “The devil we know is better than the devil we don’t know.”
In order to retain and grow your customers, you have to focus on the value you are delivering. Why else will people with a basic tendency to change suppliers remain as a customer? It must be because they know they will not get the same value from another company as they do from your business.
Not only must you know how valuable your company is but you have to find ways to get the message across without sounding like a used car salesperson. And this messaging has to be truthful and frequent (but not so often as to make you be seen as a spammer).
Keeping customers is getting to be serious work but unless you invest the time and effort, you will quickly find that you have lots of time on your hands because your customers have moved on.