Churn baby churn: Kiwis grab customer service bull by bad business horns

Despite our apathetic streak (or, perhaps more accurately, a national belief that if you just keep moseying on things will probably come right eventually), new research has showed that New Zealand consumers are actually fighting back against poor customer experiences and voting with their feet when businesses don’t meet their expectations.

The study, which was commissioned by RightNow, a “customer experience suite that helps organisations deliver exceptional customer experiences across the web, social networks and contact centres, all delivered via the cloud”, found nearly two-thirds (61 percent) of New Zealanders had removed their business from companies who didn’t measure up.

More than 1,000 consumers across Australia and New Zealand were surveyed about their customer experiences with seven key industries—telecoms, internet service providers (ISPs), insurance, finance, travel/hospitality, utilities and online retailers—and it found consumers in New Zealand to be more proactive than their Australian neighbours at responding to poor customer experiences, whether by boycotting a business following something they’ve experienced directly, or as a result of something they have seen broadcast on the social web about the experiences of others.

While the survey showed that social media broadcasts about poor customer experiences have the power to negatively influence the people who see them, it also found that positive discussions on the social web can also help drive sales. 23 percent of New Zealanders said they have read a positive consumer discussion about a company’s products or services on a social media site and made a purchase. And 67 percent of those purchases were online.

New Zealanders also tend to be more active on the social web than Australians and are more open to interactions with companies through social networking sites like Twitter, YouTube and Facebook. Of the two-thirds (63 percent) of New Zealanders actively participating on the social web, 40 percent said they would be happy for a company to resolve and support their customer service issues via social networking sites. In Australia only 27 percent of consumers were open to this type of interaction.

Likewise, when consumers were asked about how companies might interact with them through social networking sites, in each case New Zealanders appear happier to socially engage with companies. In particular, consumers in both countries were asked how they would feel if they posted a negative comment about a company on the social web and the company contacted them to try and resolve the issue. In New Zealand 64 percent of people would welcome this type of interaction, versus 49 percent of people in Australia.

Brett Waters, RightNow’s Vice President Asia-Pac South, says it’s second nature now for most New Zealanders to interact with friends and family through social networks, so engaging with companies on the same way is also appealing.

“Good customer experience is all about connecting effectively with customers through their preferred touchpoints, whether it’s the contact centre, the web or socially,” he says. “My advice to companies is to embrace social media as an additional customer interaction channel, integrating it as a seamless part of the overall brand strategy in order to better serve consumers and deliver the standard of customer experiences they expect.”

New Zealanders do place great importance on word-of-mouth recommendations from friends and family (69 percent) and the transparency afforded through online customer reviews and feedback also holds sway during the purchase decision, with 61 percent of consumers placing confidence in what others say about a company.

Among those New Zealanders boycotting businesses, just 40 percent felt the company was aware they had defected, while just 25 percent said the company had tried to win back their business (see figure 1). Perhaps not surprisingly, the finance industry was identified by consumers as having the highest customer churn following a poor customer experience. Travel companies are the least likely to realise they’ve lost business and, subsequently, are among the worst at trying to win back that business.

Online retail findings:

  • 22 percent of New Zealanders said they’d had a poor customer experience when making a purchase with an online retailer, making it the best industry (along with travel companies) at providing customer experiences.
  • 55 percent of New Zealanders have stopped doing business with an online retailer following a poor customer experience, making it the sixth worst industry for customer churn.
  • Of those removing their business from an online retailer following a poor experience, 22 percent felt that the company was aware they’d removed their business.
  • Only eight percent of New Zealanders felt that the online retail company had tried to win back their business, making it the worst at trying to recoup lost business

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