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February 6, 2013

Guest blog: Why do we keep switching our IT suppliers?

Rackspace asked research company, Vanson bourne, to look into the issue of the majority of companies switching IT suppliers. Taylor Rhodes, International managing director at Rackspace writes for CBR about the results.

By Cbr Rolling Blog

Switching IT suppliers is not just costly, it’s also a massive hassle, yet 69 per cent of companies have done just that in the past year. What’s leading us to do this? At Rackspace, we had the independent research company, Vanson Bourne, look into the issue at 250 UK companies with 250 or more employees.

Perhaps surprisingly it’s not technical failings alone that are leading to contracts being cancelled. Sure, downtime and technical faults etc. are an annoyance, but it’s more how suppliers deal with their customers that’s the issue. Of those that have switched suppliers, over six in ten were doing so either because of a supplier’s response time to faults or the quality of their communication. Less than a fifth blamed it on a lack of technical expertise on their supplier’s side.

We’re also talking big money – the IT contracts that firms are ripping up are worth between £850k to £2.3 million – all of these directly in response to customer service issues. Nearly half of all respondents said that customer service has become increasingly important for them in the last 12 months. Perhaps this is underlining the fact that the market for IT services has become even more competitive and that companies are rightly increasingly exercising their right to switch their business to suppliers that do care.

So what are the learnings from this? For me, it underlines just how important customer service is. You can’t outsource it, keep customers in the dark or provide standard answers from "scriptbots". Problems have to be dealt with head on with clear, timely and transparent communication. Faults sometimes happen, but the real difference is how your IT partner responds. By and large companies will forgive this (provided it only happens rarely), but what they won’t excuse is mis-information, poor communication or the perception that their supplier doesn’t care.

The results perhaps show that there’s a real opportunity for IT companies to not only differentiate themselves on the quality of their technology but also by providing the level of customer service their clients deserve. You can only do this by employing the right kind of people who are obsessive about going the extra mile for customers and who want to build long-lasting relationships. This is something we’re very passionate about with our Fanatical Support customer service.

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