Billions Wasted on Poor Customer Experiences

A new report has revealed that bad experiences cost UK brands billions each year.

The survey from Magnetic North compared the buying experiences of 1,000 consumers across multiple market sectors, including utilities, phone, TV and broadband, clothing, travel, home improvement, entertainment and groceries. It found that 92% of consumers have had a poor service experience; one in three have acted on their frustration by abandoning a purchase because they couldn’t find the information they needed.

The survey highlights an increasing preference for dealing with businesses via the web, with 62% preferring to research online and 69% preferring to make a purchase online. The web is even the preferred channel for negative feedback, with 41% of consumers preferring to make complaints online, compared to 24% on the phone. As a result, brands may need to make the whole customer experience multichannel, right through to the feedback process.

Consumers are increasingly making purchases via their mobile, with one in five preferring to research potential purchases or service providers on a mobile or tablet device. This highlights the importance for brands of making the entire customer experience mobile friendly.

The UK’s consumers are not just abandoning one-off purchases but are also switching long-term allegiance; almost half (46%) of consumers have moved to a competitor as a result of bad service.

Top reasons for switching to a competitor include difficulty finding customer service contact details (71%), waiting in contact centre queues with no callback option (66%) and dealing with contact centre agents who have no knowledge of the customer’s previous interactions (66%).

The report reveals that 71% of consumers would consider moving to a competitor if they had to repeat their query to multiple agents, and 32% would go to a different business straight away if their first choice did not meet their expectations for a response time.

“The customer experience landscape has changed. Customers now hold the power and they won’t hesitate to take their business elsewhere if brands can’t meet their demands. Businesses will have to adapt to becoming more customer centric in order to stay competitive,”  said David Ford, Managing Director of Magnetic North. “Negative experiences are resulting in customers abandoning purchases and this is costing UK brands billions each year. And with our research revealing that 92% of consumers have had a bad customer experience, no brands can afford to be complacent.” 

The full results of the research are available to download – ‘Customer Experience to Revenue’