Nearly 74% of Consumers Will Switch Providers After a Poor Contact Center Experience, According to New Research

Despite the proliferation of self-service options, phone-based customer support remains the most popular and critical customer service channel for brands, according to the 2020 CallMiner Churn Index, which was released today. CallMiner found that consumer reliance on phone-based customer support increased by 17% since 2018. The stakes are also higher: Nearly three quarters of consumers surveyed will switch providers after a poor contact center experience.

“Our research found that most consumers want to stay loyal to brands, but they are being driven away by poor customer experiences and ineffective service,” said Paul Bernard, CEO at CallMiner, the leading platform provider of award-winning speech and customer engagement analytics. “We estimate that the cost to U.S. businesses is approximately $168 billion[i] in customer churn every year.”

CallMiner surveyed 2,000 U.S. adults[ii] that have contacted a provider over the past 12 months to understand what makes them stay loyal or switch. Select research findings include:

• Contact Center Performance drives both loyalty and churn. 90% of consumers said they are likely to stay loyal after a positive call center experience; 7% said they are likely to switch after a negative call center experience.
• ’Unplanned’ churn costs brands $35.3 billion. CallMiner found that significantly more consumers switched providers (81%) than planned to switch providers (63.9%), which led to an estimated 88.3 million unplanned switches from 43.3 million people.
• Emotion is key to retention. While price remains the number one driver of churn, it declined in importance by 8% from 2018. Emotional factors – like loyalty and fair treatment – increased in importance and made up three of the top four reasons for switching brands.
• Super-agents shape customer emotions. Nearly 50% of customers had their emotional state change from negative to positive following their last brand interaction; nearly one in five report having their emotional state shift because of poor agent behavior.

“The rise of self-service has made human support even more critical. Now more than ever, when customers call a provider, we expect one of two things: they are already frustrated due to a lack of information and online support, or they have a complex and sensitive issue. Both cases require emotionally intelligent ‘super-agents’ who can connect, solve problems and deliver exceptional service,” said Adam Walton, COO at CallMiner. “Customer service agents are on the front line, managing their own transition to working from home and facing significant new demands for help from customers where they are often the only human interaction between consumers and brands. Equipping agents to satisfy the needs of emotionally charged customers is essential for retention, loyalty and revenue.”

Overall customer churn increased by 12% since 2018, with respondents averaging two provider switches per year. The industries with the highest levels of churn were banks (+69% vs. 2018) and broadband providers (+72% vs 2018).

For more results and insights – including churn by industry, the most popular customer service channels, and the primary reasons why customers switch providers, download the full report – the 2020 CallMiner Churn index – here.

References

[i] According to the United States Census Bureau there were estimated to be 254,713,870 adults in the United States in 2019. A conservative estimate of the cost of acquiring a new customer across all the main sectors in the survey is $400 per person. This is based on the level of incentives applied to attract new customers and a conservative estimate of associated sales and marketing costs. In the last 12 months 81% of US adults (206.32 million) changed an average of 2.04 providers each. 206.32 x 2.04 x 400 = $168 billion

[ii] The research was carried out for CallMiner by 3Gem Research & Insights. 2,000 US adults responded to an online survey in March 2020

[iii] The difference between those who are planning to switch and those who switched is 17% of the adult population = 43.3 million people. 43.3 million people switching at an average of 2.04 times at $400 per switch = $35.3 billion. The total cost of avoidable churn is therefore at least $35.3 billion