India’s ‘switching economy’ worth $331 billion: Accenture study
NEW DELHI: Customers switching from one brand to another on account of poor user experience and customer service represents an opportunity worth $331 billion, consulting firm Accenture said.
According to the study, Global Consumer Pulse Research: An Indian Perspective, 88% of the respondents from India said they switched companies in at least one industry due to poor service.
This is significantly higher in India than the global average of 64% where switching due to poor service is more prevalent in service-oriented industries like banking and internet service, the study added.
The global study, which covers countries like Belgium, Brazil, France, Germany, Japan, the UK, the US, China, Mexico and South Africa, pegged the global switching opportunity to be at $6.2 trillion in 2014 from $4.9 trillion in 2010.
“Switching customers represent a huge potential loss of revenue for companies that fail to retain them, and a huge opportunity for those that can attract them. Accenture estimates that the switching economy in India is currently worth $331 billion,” it said.
About 86% of the respondents who switched said the companies could have done something to prevent their service providers from switching.
Also, 56% said they are willing to give their service providers another chance, if the companies make it worth their while.
“Customers are more loyal to experiences than to companies, products and brands. This distinct lack of customer loyalty to companies is borne out by customer action: seven in 10 customers said that they are more likely today to switch from one provider to another than 10 years ago,” it said.
While poor customer experience emerged as the primary reason for switching companies (59%), lack of knowledge of customer service representatives (53%) was the second-most cited reason for switching.
Interestingly, 73% respondents felt companies are unable to keep pace with their service needs.
The study found increased use of technology in customer service — social media channels for customer service request initiation; or self-service options on websites or via mobile devices; or live chat via the internet — has improved the level of service significantly in India.
“Forty-seven per cent say they are more likely to do business with companies they can interact with on social media… Nearly 80% of Indian customers (61% global) agreed that increased use of technology has improved the level of service,” the study said.