Never mind great resignation, customer exodus is worse

Business chiefs might be ramping up their staff retention policies to tackle the “great resignation” but a new threat has emerged among their customers, with the average churn rate hitting 33% in the UK, meaning firms are losing one in three customers they gain.

That is the damning conclusion of a new report by SugarCRM, which the inadequacies of traditional CRM solutions for the exodus, leading to poor customer experience and a lack of customer centricity.

The 2022 CRM Impact Report, which quizzed 1,600 global sales and marketing professionals including 400 in the UK, warns that firms must tackle organisational turbulence across the customer journey to address today’s post-pandemic customer experience realities.

Last year, SugarCRM’s global survey research reported that customer churn was costing mid-market companies an average of £4m a year. This year, 58% of global respondents reported their rate of customer churn has increased over the last 12 months.

This is yet another challenge for brands fighting an onslaught of forces, including supply chain disruption and employment challenges, and threatens the future of companies across all industries worldwide.

Nearly three-quarters (74%) of UK respondents suspect customers are leaving due to poor customer service or experience. This could explain why 70% of global respondents said they need to do more to improve customer trust in their brand/organisation and why 73% underscored the need to act on customer feedback for improved customer service and experience.

Nearly three-fifths (58%) of UK respondents admit to not being able to identify customers at risk of leaving and even more (61%) say they struggle to track customer churn rates effectively.

Survey respondents also voiced frustration in filling the top of the sales and marketing pipeline, making the issue of customer flight even more pronounced. More than half (53%) of sales leads generated by marketing are deemed either poorly qualified or under qualified, and more than a quarter (27%) of sales leads go by the wayside, receiving no follow up.

While over three-quarters of those polled worldwide say a consolidated view of customer information across the organisation is critical to delivering optimal customer experiences, three-fifths (59%) of UK respondents say they are missing data to improve marketing campaigns and sales conversions. Additionally, one in four sales respondents worldwide believe they could miss a quota due to incomplete data across the customer lifecycle.

SugarCRM chief executive Craig Charlton said: “Companies face a daunting scenario – struggling to fill the top of the funnel with qualified leads while losing customers at the bottom of the funnel.

“A key contributor to losses on each side of this equation is a lack of data. Data fuels the actionable insights that sales, marketing, and service teams need to act decisively at every critical touchpoint – to drive high-definition customer experiences – and to reverse the ‘great customer resignation’.”

While CRM strategies are, by their very nature, designed to combat customer churn and realise greater sales and marketing synergy and assurance, three-fifths (58%) of UK respondents think their CRM system is wasting time and money, while a similar proportion (56%) say their current CRM system cannot be customised properly to meet their specific needs.

This negative view of current/legacy CRM solutions may be why 59% of UK respondents said they plan to change their current CRM platform within the next 12 months, the study reveals.

Additionally, more UK sales and marketing leaders are turning to AI, with nearly all (94%) saying plans to deploy AI technology to augment existing processes will increase over the next two years.

SugarCRM senior vice-president of product marketing Volker Hildebrand commented: “Clearly, customers are changing the rules of engagement, and many companies are at an inflection point. Technology can be the game-changer here, but the time to act is now.

“It starts with removing blind spots: understanding what your customers want and predicting what they need next. It continues with a focus on eliminating busy work – making it easier for customers to engage and empowering employees to create the experiences customers expect. Finally, it removes roadblocks and friction points to enable brands to consistently deliver on their promises.”