We recently carried out a piece of research to evaluate the loyalty of car insurance and energy customers and their tendency to switch suppliers*. What we discovered provides useful learnings for brands working in other sectors too.
A significant number of customers surveyed (40%) regularly switch their car insurance or dual fuel provider, primarily to save money. But, perhaps of greater interest is the fact that, while the remaining 60% don’t switch regularly, they are all in the market for switching. It can take just one bad experience to make a customer consider becoming a regular switcher. So relying on customer apathy isn’t a wise strategy for a brand.
Brands have the power to stop customer switching
The good news is that it is within a brand’s power to encourage a customer to stay, as much as it is to make them switch. While price is the principle reason for customers to switch, other factors like service can play a key part. For brands that want to avoid a customer base of ‘price junkies’, the answer is to work hard to build trust, reduce the risk of bad experiences and reward existing customers.
Brands that have customer service strategies that allow service staff to deal with situations as they arise, and treat customers as intelligent people, demonstrate that they have the customers’ interests at heart and encourage loyalty. This helps brands to avoid the switching spiral.
One important element of customer service strategies is to measure the right things when running customer satisfaction research. There is no point asking how quickly the phone was answered or if the person was helpful if operatives have no insight into the value of the customer calling and no opportunity to delight them with an offer that makes them feel really special. While a price deal is the obvious offer, there may be other benefits that brands could consider giving to their most loyal and valuable customers.
While some consumers do enjoy the ‘game’ of finding a new deal, there is an opportunity for brands to focus on the loyal customers. By understanding every step of the customer journey and turning the typical sales approach on its head, by under-promising and over-delivering, brands can truly surprise and delight their customers.
Download a PDF summary of the findings or simply get in touch to find out more.
These findings were published in Marketing Week on 17th October – Marketing Week Trends | Lessons from the loyalty losers.
Quantitative online survey: 1,977 nat rep sample from Panelbase used to investigate customer switching behaviours as well as their attitudes towards switching, loyalty, service and brands.
Qualitative online community: 30 consumers selected from the loyalty/switching segments to take part in an online community to explore their attitudes, behaviours and motivations in greater depth.