Switching or reviewing household utility or service providers is now viewed as an annual event by a third of consumers (33%), according our latest research...
Our latest research, "Retaining Customers in a World of Choice", based on a nationally-representative sample of 1,000 UK adults, has revealed the large challenge companies face in keeping customers, against a growing culture of switching.
Half of UK households (50%) see switching as important in managing rising living costs and a third make this a regular, annual job.
A further 17% said they would only review or switch accounts when there was a pressing need. This could be anything from changed financial circumstances, disgruntlement at poor customer service or supplier price rises.
Fewer than one in eight people say that they don’t habitually switch accounts or regularly review their suppliers.
Energy and insurance companies feel the biggest brunt of switching culture, with 38% of those surveyed having switched their energy supplier in the last year, 34% their motor insurance and 30% their homes and content insurance.
Consumers were most loyal to credit card suppliers (just 14% switching) and subscription TV services (18.5%). Many consumers (45%) also stated they would look to review or switch their water supplier immediately, should the opportunity to do so arise in the future.
“Consumers are inundated with marketing from service providers and price comparison websites attempting to entice them to switch, often promising big savings. This may or may not always be the case, but it has succeeded in changing consumer habits and, for many, switching is now an annual ritual."
Monica Mackintosh, customer services director, Echo Managed Services
Faced with this switching culture, businesses have two choices. Either accept it as an inevitable cost of doing business, or take a proactive approach to engage customers before they choose to switch. Consumers want to feel that their suppliers are looking out for their best interests, helping them get the best deal and tailoring services to their own personal needs or usage.
“For example, energy companies, who experience the most switching, have been subject to recent and sustained negative publicity, which has led to a loss of trust. This even became a major talking point in the recent election, with energy companies looking at ways to consider the impact of planned price caps.”
Monica Mackintosh, customer services director, Echo Managed Services
Our research report also revealed that while price was an important switching factor (61% saying it was a key motivation), it wasn’t the only consideration.
Businesses that fail to provide consistent and quality customer service are at serious risk of losing customers, with a third of consumers (33%) saying they would consider switching for this reason.
Poor complaint handling is also a contributing factor, prompting 18% of consumers to switch their suppliers, while many are influenced by expert advice – from someone like Martin Lewis – to move accounts (20%).
Businesses also face increasing pressure when it comes to ethical practices as more than one in 10 (12%) consumers would consider changing companies in favour of another that is seen as being more socially and environmentally conscious – for instance an energy provider that prioritises renewable energy generation.
ENDS.
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