Churn is a dirty word in every industry. It affects everything from brand reputation to employee morale to the organization’s bottom line. Finding ways to improve customer retention is critical, as a high churn rate can cripple the growth of an organization. And unfortunately, poor customer service is one of the key factors contributing to customer churn.
A comprehensive survey was conducted to learn more about the drivers of customer churn following interactions with customer services, to discover when consumers are most likely to churn, and to gauge consumer sentiment about ways companies can improve customer loyalty.
Key Insights
Survey data shows that 39% of Americans who canceled a contract with a company in the past 24 months cited customer service as the primary reason for cancellation. Key takeaways:
- Churn is widespread. All verticals face high churn due to poor customer service, including telecommunications (52%), retail/ecommerce (13%), healthcare-related products or services (12%), insurance (11%) and banking/financial services (11%).
- Churn is triggered by high customer effort. Customers canceled their contracts because companies wasted their time (34% waited too long to have their issue resolved), because they had to call more than once (47%); 13% left because of inferior self-service options, and others churned due to untrained or incompetent agents (32% thought the reps were rude or had a negative approach).
- Need for improved customer retention strategies. While 41% of customers actively searched for an alternative provider, the majority of respondents (59%) churned passively, either because they were disengaged with the company’s service or because they heard about or were offered a better deal from a competitor.
- Reactive strategies are ineffective. Despite 54% of companies trying to retain their customers after they canceled their contracts – usually by offering a discount or an apology – their efforts were largely unsuccessful.
- Fallout from word of mouth. 76% of customers admitted sharing their disappointment about a company’s level of service with others. 70% discussed the company negatively with friends, family or colleagues, 18% shared it on their social media channels, 12% posted on the company’s official social media channel or website, 9% shared it in an online forum, and 4% even discussed it with the media.
For full access to the 2019 Customer Churn Survey Results, which includes deep dives into the data and eye-opening quotes directly from customers, download the comprehensive report now.
