The churn of the digital consumer

While banks are responding to the growing consumer demand for digital, and the need to manage costs, they have to work hard to get the balance right between the human and digital customer experience

The churn of the digital consumer

Organisations looking to introduce more digital channels and embrace this technology trend need to consider how to make the digital experience more personal, more intuitive and faster to avoid the increase in customer churn we are seeing across the board

The rise of new technologies and their impact on a multitude of sectors has defined the digital disruption of recent years. Banks continue to close more branches as the thirst for more efficient and online services grows, while a renewed focus on the digital customer experience is sweeping through the airline industry.

This drive for innovation is effecting organisations of all shapes and sizes, as they reconsider their operating models to respond to the demands of an ever more digital consumer.

According to the Institute of Customer Service, this demand is only set to rise, revealing recently that it is younger consumers that expect better service.

>See also: The digital customer service: 4 things brands should

But recent research from Verint has revealed a far more complex prognosis, examining the causal link between the rise of digital technologies and customer churn, as companies are having to respond, or risk losing valuable business.

The global picture of customer loyalty

Verint conducted research of more than 24,000 consumers in 12 countries across nine industry sectors – in partnership with Opinium Research LLC, and additional insight from analysts IDC.

It revealed that 57% of consumers across all sectors around the world have been with their service providers for more than three years. This represents a 7% decline in customer retention globally, in comparison to data from one year earlier.

A gloomy picture that equally applies to every sector – with a fall in retention figures between 2015 and 2016 also shown across each of the nine surveyed. From insurers to banks, utility providers to retailers, organisations are all increasingly struggling to retain their valuable customers.

But, as this global trend for a decline in customer retention is observed, can this be correlated to the rise in the adoption of disruptive digital technologies?

The digital agile consumer

The study found that consumers who prefer to engage with brands via digital channels are more likely to swap providers than those who engage through human touch interactions, such as via the phone or in-store.

This link between communication channel preferences and retention showed that just under half (49%) of those who prefer to engage with organisations via digital channels have been with providers for more than three years, compared with 58% who prefer to pick up the phone and 57% who prefer to go in-store.

>See also: Adapt fast to the digital mindset of young customers

Tapping deeper into the impact that different customer experiences have on loyalty and brand endorsement, the research also highlighted that consumers who have a good customer service experience on the phone or in-store are more likely to behave positively toward a brand than those who go online.

Those customers who interact with organisations via human touch engagements are also more likely to shout about their positive experience. Here, consumers were 38% more likely to renew their product or service (even if it wasn’t the cheapest option), 27% more likely to sign up to an organisation’s loyalty programme, and 19% more likely to leave a positive review.

When executed properly, the value of the human touch in customer service can drive better customer engagement, retention, and feed into the bottom line.

The future and beyond

The drive for digital innovation across a huge range of sectors is unstoppable, and the consumer demand for these services is only set to rise. But with this demand comes equally high expectations, especially from a younger more tech-savvy generation.

As this consumer base becomes more prevalent in the market place, so brands across sectors, and indeed across the world, are seeing their retention figures fall.

>See also: Financial services: the customer is still always right

Crucially, businesses need to consider the effect that adopting digital services can have on their wider customer service, and ensure they don’t neglect the highly valued human interaction.

What’s clear from this research is that element is more crucial than ever and helps drive valuable customer retention and loyalty.

Organisations looking to introduce more digital channels and embrace this technology trend need to consider how to make the digital experience more personal, more intuitive and faster to avoid the increase in customer churn we are seeing across the board.

 

Sourced by Marije Gould, VP of marketing EMEA, at Verint Systems

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