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Post-pandemic customer loyalty challenges: Poor service increases likelihood of brand churn

by | Aug 24, 2022 | Public Relations

Newly released research from customer service firm TechSee focuses on the impact of the pandemic on consumer behaviors, with key findings showing a significant loss of product-dependent brand loyalty. The data show that more than one in three US customers lack brand loyalty, with a full 38 percent of respondents saying they did not feel any loyalty to a brand and switched to a competitor after being approached.

According to the firm’s 3rd annual State of Customer Loyalty and Churn, the 2022 Edition, consumer loyalty today is most impacted by the customer experience and overall service quality. Because of this, poor customer service experiences have increased the impact on churn. According to the survey, 43 percent of customers switched products or canceled a contract due to poor customer service in 2022. This is a 10 percent increase compared to the 39 percent of customers who said the same thing in 2019, pre-COVID.

Post-pandemic customer loyalty challenges: Poor service increases likelihood of brand churn

The data show a growing intolerance for poor service quality

Customers expect high quality experience as part of their purchase. As a result, companies who fail to deliver will face customer retention struggles as the market shifts to experience-led growth. Reducing customer churn is essential, with even slight fluctuations impacting profit margins significantly. Additional research published by TechSee earlier this year revealed that 67 percent of U.S. customers are not satisfied with the service they receive. However, these frustrated customers are hungry for innovation that enables better service delivery. They are open to embrace technology including submitting pictures (63 percent), using AI (73 percent), and receiving visual guided instructions (65 percent) in order to receive faster resolution.

Post-pandemic customer loyalty challenges: Poor service increases likelihood of brand churn

Other key survey findings from the report include:

  • 80 percent of customers churned due to dissatisfaction with service quality. Customers reported that a single negative service experience (21 percent), or ongoing dissatisfaction with service quality (59 percent) as the reason they left.
  • The #1 driver of poor service is broken cross-channel flows. Customers churn after having to repeat themselves multiple times when speaking with multiple representatives (31 percent) or moving between service channels (14 percent).
  • The majority of customers would only change their mind about leaving if the company offered them a discount (36 percent) or an upgrade at no extra cost (40 percent). This can make reactive retention strategies very costly.

Post-pandemic customer loyalty challenges: Poor service increases likelihood of brand churn

“Sharing our new report on the state of customer loyalty should be an eye-opener for companies to focus on experience-led growth,” said Amir Yoffe, COO and co-founder of TechSee, in a news release. “Today, customers are less forgiving than they’ve ever been when it comes to cumbersome customer service.”

He added: “Our data shows that broken omnichannel flows are the number one driver of churn from poor service, something which can be easily fixed with the right processes and technology. Subpar experiences, such as customers having to repeat themselves when speaking with multiple representatives are still damaging loyalty, reputation and revenues for many great businesses.”

Post-pandemic customer loyalty challenges: Poor service increases likelihood of brand churn

Download the full report here.

The data is based on a total of 2,706 completed survey responses from a nationwide sample of U.S. adults.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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