Suppliers not fighting to retain switching customers

Companies could be missing out on millions by not fighting for customers, says report

Nearly half of all customers who switch energy suppliers say their previous supplier made no effort to retain their business.

Research by customer contact centre specialist Echo Managed Services found that 40% of customers said they were allowed to leave without a fight. However, the research also found that 14% of those thinking of switching had been convinced to stay with their old supplier, suggesting that companies could be missing out on millions of pounds of revenue by allowing customers to leave.

Promises of better services or better financial benefits were among the reasons consumers were convinced not to change supplier.

“It appears that for many businesses, when a customer contacts them to say they are thinking about leaving, they are failing to empathise with and retain their custom,” said Chris Cullen, head of sales and marketing at Echo.

“This could be a costly mistake as clearly a significant number of consumers have been convinced to stay with a business when the right effort has been made to retain them.”

The survey also revealed consumers’ biggest issues when switching energy supplier. Poor customer service was flagged as the main cause of frustration by 31% of respondents, while 28% cited a lack of transparency during the process.

Errors and mistakes during the switching process were an issue for one in five customers, with 17% said they experienced delays in new services starting, even after their old suppliers had turned their services off.

Only half of all those who switched provider in the last year described the process as smooth and simple, while one in 10 described it as difficult and frustrating.

Cullen added: “Businesses that put an increased focus on understanding their customers’ needs, reward loyalty and take a proactive, tailored approach to retention may benefit from a reduction in customer losses. However, there is a balance to be made because for some customers unwanted contact could cause further frustrations.

“Businesses which switch off to customers’ needs during the switching process also risk losing that customer forever when there is actually every chance they might come back at a later date which, considering that most consumers review their supplier on an annual basis, is not impossible.

“Customer retention strategies should focus on trying to satisfy and keep hold of customers at every stage of the business relationship. However for customers who do decide to leave, businesses should still ensure the switching process is made as smooth as possible so that customers leave with a good final impression.”