BUSINESSNEWS
CUSTOMERS DEFECT TO
COMPETITION – EVEN WHEN
COMPANIES PERFORM WELL
More than half of customers
are likely to defect to a
competitor brand when a
product needs updating
or their contract expires,
according to a new study from
global research consultancy
TNS.
Almost two thirds (60%) of
customers are likely to defect
to another brand when buying
new electronic products; 57%
would replace their car with a
different brand; and 64% would
opt for another manufacturer
when selecting white goods like
a washing machine.
According to TNS’s global
analysis of 40,000 customers,
companies can no longer
ensure loyalty and spend just by
providing a reliable, consistent
service. In fact, many of those
who defected to a competitor
actually felt their current
‘The most
successful
businesses get
smarter about
customer
experiences’
provider was performing well.
Companies that fail to address
this gap are wasting millions of
pounds trying to improve their
individual performance in the
eyes of customers, while failing
to understand the risk posed
by other providers, and more
importantly, how attractive
these competitors are to their
customers.
Stefan Schmelcher, Global
Head of Customer Experience
at TNS (pictured) said:
“Given the fierce competition
in many markets, securing
valuable customer relationships
requires a deep understanding
of what drives your customers’
behaviour.
“The most successful businesses
are able to translate what’s best
about their performance into
an active customer preference.
They don’t just invest in any
service or promotion; they get
smarter about the customer
experiences that matter and
deliver on the bottom line.
Simply throwing resources at
different touchpoints – without
understanding how to build
a personalised service – will
only undermine long-term
credibility.”
TNS found that customers
with the strongest relationships
to their providers are three times
more likely to stay loyal, six
times more likely to recommend
the brand and five times
more likely to buy additional
products and services from the
company.
Nuisance claims firms
face huge fines
their annual turnover, meaning they could
total hundreds of thousands of pounds and
potentially millions in some cases.
Rogue claims firms responsible for
providing bad service and bombarding
people with nuisance calls face fines
totalling hundreds of thousands of pounds
under new plans announced on 27 June by
Justice Minister Lord Faulks QC.
Claims management companies (CMCs)
that flout the rules will now be able to be fined
for breaches, including:
• Using information gathered by unlawful
unsolicited calls and texts
• Wasting people’s time and money by making
spurious or unsubstantiated claims
• Misleading marketing
Under the proposals the fines will be based
on the turnover of the company involved and
the nature of the offences. For large claims
firms fines could be up to 20 per cent of
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AUG 2014
‘fines could by up to
20 per cent of their
annual turnover’
Lord Faulks said:
“No longer should claims companies be
able to plague hardworking people and waste
everyone’s time. The scale of these fines shows
just how serious we are about stopping them.
“This is also good news for the reputable
firms in this industry, as it will boost
confidence in the services provided by the
sector.”
The fines, due to be introduced later this
year, will be brought against companies which
break rules set by the Claims Management
Regulation (CMR) unit at the Ministry of
Justice (MOJ).