Retailers warned as loyalty plunges

The new bosses of Tesco and Morrisons would be well advised to put their contact strategies at the top of their “to-do” lists as they look to turn around their brands, according to a study which shows poor customer service is eroding consumer loyalty and confidence in retailers.
Commissioned by customer service specialists Kana Software, the report shows nearly a third of UK consumers (30%) have become less loyal to retail brands in the past five years, with a quarter of those customers identifying poor service as the main reason.
One major issue for customers was the number of times they had to repeat their complaint to different people within the same company. Almost half of respondents (48%) said they had to repeat information during their last communication with a retailer.
All age groups identified repetition as a problem; however, it occurs most frequently for customers under the age of 35, with one in 20 repeating themselves at least five times. Only 30% of these younger customers had their issue resolved after one interaction. By contrast, 64% of customers over the age of 65 did not have to repeat their complaint at all, feeling satisfied after first contact.
This apparent disparity between levels of service has the potential to drive younger consumers elsewhere, claims the study. Of those who feel less loyal to retail brands, 37% of 18-to-24-year-olds cite service as the key factor compared with just 20% of those aged 65 and older.
“By forcing consumers to repeat themselves, often several times over a prolonged period, organisations not only deliver inefficient service that costs them money – they seriously affect future consumer loyalty,” said Steven Thurlow, head of worldwide product strategy for Kana. “The need for repetition shows not only poor management of customer data, channels and context, but more fundamentally a lack of ownership of the consumer’s problem and lack of appreciation for their effort levels.
“When you have an issue, you want to speak to someone who knows your back history and is able to take action on your behalf. Without a true sense that different channels of communication are linked, people feel that they are wasting their time and, ultimately, this leads to an erosion of loyalty in the retail brand.”