Wednesday, April 16, 2008

Merry-go-round of telecom customers proves costly

Whatever it costs the moronic b***s is still not enough in my opinion. That they tolerate the huge turnover rate described below shows what morons they are

CUSTOMER churn costs local businesses $1.5 billion a year, with telecommunications companies the biggest losers. A poll of more than 600 Australian consumers found that over the past 12 months, telephone, mobile phone and broadband companies suffered the most from customer turnover, ahead of electricity providers, banks and insurance firms. Seventy-nine per cent of respondents singled out pricing as the main factor for leaving a company, followed by a lack of incentives to stay loyal (48 per cent).

Poor customer service continued to be the bane of many consumers, with 42 per cent saying their suppliers could not adequately solve their problems, while 20 per cent had issues with inexperienced staff manning their calls.

The survey, commissioned by IT vendor BMC Software, said six out of 10 consumers had changed a supplier in the past year. "This switching merry-go-round is costing Australian business approximately $1.58 billion per annum when the cost of a single customer is multiplied by the average number of churns per year and the adult population (13.2 million)," the survey said. "Furthermore, when the impact of negative word of mouth is taken into account, these costs will rise still further to a conservative estimate of $2.376 billion."

The results do not surprise marketing expert Adrian Payne, a professor of marketing at the University of NSW. Dr Payne said telephone companies had a great deal of difficulty in becoming the "corner-shop corporation". "How can you look, think and feel like a corner shop when you have tens of thousands of customers? This is what they're grappling with," he said.

Organisations with high churn rates should conduct a "defection analysis" to determine the root cause of the loss, rather than ramp up advertising. "It's the leaking bucket syndrome," Dr Payne said. "If they can't do anything about it, they pump money into customer acquisition and there are many problems related to this approach when you don't know why you're losing those customers in the first place."

The study, conducted by Ciao Research, surveyed participants between the ages of 18 and 64 with a yearly income of below $30,000 to over $130,000.


1 comment:

Anonymous said...

I am surprised it is only 20% you 'd have to add a higher percentage because of all those Australians who never complain about anything.There has to more than 20% unhappy about not getting their problems solved with telstra, surely. Also the call centre's .The operators have names but they dissapear into the vortex never to be traced again.And that's how they like it. Suckers!