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Industry Research : Consumer Satisfaction Rates in Canada Decline amid Market Disruption
Canadian companies are struggling to keep pace with the increasingly "always on" nature of their customers, their greater use of digital channels, and their growing acceptance of non-traditional providers, according to new research from Accenture (NYSE: ACN). As a result, the "Switching Economy" – the potential revenue up for grabs in the Canadian market due to changes in consumer spending patterns and switching rates – has swelled to 163 billion US$, a 16 percent increase since 2010.
The Canadian findings are included in Accenture's tenth annual Global Consumer Pulse Research, which gauges the experiences and attitudes of 23,665 customers worldwide on marketing, sales and customer service practices. The survey included 1,215 Canadian respondents.
"The Canadian customer is tougher than ever before, and many companies aren't doing enough to keep them. Customer experience is the new marketing, and expectations are higher than ever," said Berkeley Warburton, Sales and Customer Service Strategy lead for Accenture in Canada. "While many companies have been chasing the opportunity digital brings, they have not addressed the root causes of the problems that are exposed when they don't execute well. Companies have been focused only on 'doing the same things better' when these issues really require them to 'do things differently'."
Nearly two-thirds of consumers (62 percent) report that the number of brands they consider has increased significantly over the past 10 years, and 52 percent believe they are more likely to switch providers compared to 10 years ago. Eighty-two percent surveyed use at least one online channel when looking for a new service provider, and over one-third (41 percent) want more digital interactions from providers. Only 38 percent of consumers strongly agree companies are effectively converging digital, mobile, social and traditional channels.
"We know that Canadians are amongst the highest internet users worldwide, we are selective, and savings-oriented. And with digital, the game just got faster," said Warburton. "Now, a customer's sense of loyalty to one brand is often overridden by another brand's personalized and tailored experience. In fact, our research shows that some companies are opening the door to 'non-traditional' competitors, such as Netflix, who are often more willing to 'do things differently' and offer prospective customers more opportunities for customization."
Over one-quarter of Canadian consumers (28 percent) feel very loyal toward their providers and only 28 percent are willing to recommend them to others, figures that have remained consistent over the past several years. Nearly 40 percent (38 percent) are open to purchasing products and services offered by non-traditional providers and about the same amount (34 percent) will consider making purchases through consumer-to-consumer channels for housing/accommodations, transportation or money lending.
Many of the common consumer complaints and habits identified by the research have been ever-present for a number of years, indicating that many companies are not addressing underlying issues effectively. Failure to quickly resolve an issue continues to drive the switching trend, with little improvement reported over the past six years. The three top Canadian consumer frustrations for customer service – solving an issue during the first interaction (89 percent in 2014 vs. 89 percent in 2009); lengthy hold times (86 percent vs. 87 percent); and interacting with service representatives who cannot answer questions (85 percent vs. 87 percent) – have remained flat.
The Accenture research also highlighted that more than one-third (37 percent) of Canadian respondents plan to spend less in at least one industry, as compared with just under one-quarter (24 percent) who said the same in 2009.
Despite high switching rates, the survey reveals a potential "switch back" opportunity for companies. Over one-quarter (29 percent) say they would consider returning to a previous provider. Top drivers of this trend include attractive pricing (60 percent) and a superior product or offering (49 percent).
Analog meets digital to help companies "do things differently"
Satisfaction with online customer service channels, including online text/video chat, mobile applications, third-party review of websites or forums and social media, is relatively solid compared with "traditional" channels with just over half of respondents reporting that they are satisfied with online text or video chat (58 percent and 55 percent, respectively), as compared to 56 percent that were satisfied with traditional contact center support.
However, despite the relatively high levels of satisfaction with digital channels, adoption of these technologies by consumers as part of the overall channel mix has remained low due to several barriers. These barriers include the lack of the right information provided by the channels, lack of trust in them, and lack of knowledge of how to access and use them.
Further, while most companies are aware of the value that digital brings, many have been slow to develop an overall strategy that incorporates these channels into their existing customer service offering.
"Many companies have suffered from two persistent customer service-related headaches that hindered profitable growth over the past 10 years: chronically high switching rates and decreasing spend by their remaining customers," said Ms. Warburton. "Companies that determine the right blend of digital and analog channels to improve the customer experience can reap huge benefits by retaining existing customers while luring more than their fair share of new ones away from competitors."
Posted by Veronica Silva Cusi, news correspondent
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Published: Wednesday, April 1, 2015