Customer Service, Not Price, Remains Top Cause of Customer Churn, Accenture Study Finds

When proposing a customer service improvement plan for your organization, one of the questions you're likely to get is, "What will it add to our bottom line?" So many factors influence the actual impact of a service initiative that it's hard to give a specific number. I can point to past successes, but even then it's hard to make a prediction. What's happening in the economy? How well does the organization follow through on the initiative? What's the competitive environment like? What other operational and financial issues is the company up against?

So, while it's hard to say "if we do this, we'll add $X to our bottom line," we can point to a lot of data that supports the role service plays in a company's bottom line. Gallup, Bain & Company, Press Ganey, and a host of other research organizations have validated the importance of quality service in generating customer loyalty as well as its impact on an organization's financial results.

The most recent data comes from a global study conducted by Accenture, a management consulting, technology and services and outsourcing company. The study resulted in an article titled, "Customer Service, Not Price, Remains Top Cause of Customer Churn, Accenture Study Finds."

The Accenture study presents figures that are consistent with studies conducted by other organizations (which, for me, helps validate the data's credibility) and further makes the case for making customer service improvement a core component of any organization's business strategy. While price will always play a role in purchasing decisions, the study shows that customer loyalty is more service-driven than price-driven; even in today's economy.

I like the fact that this is a global study and shows that people world wide make purchasing decisions that are influenced by the service they receive. Consumers around the world, including developing markets, are as likely to defect to a competitor due to poor service as consumers in the U.S.

The results show that consumers are most likely to defect based on four service issues:

  • Whether service representatives were polite and friendly.
  • Whether their issues were resolved in a timely manner.
  • Whether service representatives took ownership for resolving the customer's issue.
  • Whether customer service was available at convenient times.

If you're in the position of trying to convince others in your organization that customer service should play a key role in your company's business strategy, take a look at the article, "Customer Service, Not Price, Remains Top Cause of Customer Churn, Accenture Study Finds" and pass it along to members of your organization. You could also include some of the findings in your company's communications tools such as internal newsletters, intranet, team meetings, etc.

The more we can make the case for service excellence, the more likely the organization will embrace the tools for delivering excellent service. In today's economy, many organizations are looking for ways to cut costs. Information like that presented in the Accenture research can help ensure your organization doesn't cut in all the wrong places.