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May 14, 2013updated 19 Aug 2016 9:26am

UK firms ‘lose £12bn a year’ through poor customer service…

...or do they?

By

Research by independent research firm Opinion Matters for cloud contact centre provider NewVoiceMedia, revealed that an estimated £12bn is lost by UK businesses every year through poor customer service.

The headline figure is calculated by multiplying the average spend with a provider of £472 a year, by the number of people who said they have switched providers inside a year (about half of those surveyed, which would be about 25 million people in the UK if it applied nationally).

2,034 adults were surveyed between March 12th and March 26th.

Of course, the headline figure is really an estimate. Even if half of the population switched provider in a year through poor customer service, they’ve nearly always switched to another provider in the UK. So one could just as easily rewrite the headline, to ‘UK businesses win £12bn a year through their rivals’ poor customer service’.

The figures get even more complicated when you consider that 73% have switched once and 19% have switched more than once. Some switch away from a provider then back again based on special offers, too.

The main point though is that lots of consumers switch providers fairly often. According to Jonathan Gale, CEO of NewVoiceMedia, "Customers have a stronger influence on a business’s success than ever before and it’s surprising how many organisations still aren’t getting it right. Customer experience is a key differentiator. By doing it well, organisations can drive the customer acquisition, retention and efficiency that make leading companies successful."

According to the survey, half of UK consumers are taking their business elsewhere as a result of inadequate service – and of those, 92% have switched at least once or twice in the last year. 49% are put off from calling a business at all, for fear of being kept on hold or in a queue. This means many customers could switch to a competitor without even attempting to resolve the problem first.

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56% of those surveyed would never use that company again, 27% would tell friends and peers, and 19% would post a review online. 14% would complain via social media, and younger respondents said they were prepared to wait longer in a queue for customer service than over-55s.

66% of respondents prefer to get on the phone and speak to someone to get an issue resolved quickly and 23% would address an issue via email. 89% of those surveyed prefer traditional forms of communication such as phone and email over social media or text messages.

"This research highlights the cumulative effect of business interactions on the customer experience," said Gale. "Customers want personal and engaging experiences every time, through every channel; from the steps they take to interact with a company to the agents they deal with. Organisations can’t continue to let business slip away. Listening to the needs of their customers is the first step. The second is actively doing something about it".

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