The New Realities of Dating in the Digital Age:

Are Customers Really Cheating, or Are You Just Not Paying Enough Attention? Accenture 2011 Global Consumer Research Study

Five critical points of engagement can impact whether or not customersand their moneystay with a provider, yet most companies appear to be unaware of these relationship junctures.

Page 2 | Accenture 2011 Global Consumer Research Study

The rise of the tech-savvy generation, unstable economic conditions, and the impacts of globalization make attracting and keeping customers increasingly complex. But adapting your tactics to keep digitalage customers in a relationship with you is even more challenging.
In fact, as the results of Accentures 2011 Global Consumer Research Study show, consumers around the world are giving off mixed signals at a time when keeping consumer relationships strong is more critical than ever to providers. On the one hand, consumers claim they are more satisfied with the companies they do business with. Yet on the other, they feel less loyal to companies, increasingly switch providers and shop for better deals as their expectations continue to rise. What then, is the key to sustainable, profitable growth from a customer base that becomes harder to understand and is more inclined to cheat on their current providers with each passing year?

Our study suggests some specific ways companies could change the tide. In particular, we found that five critical points of customer engagement could have a major impactpositive or negativeon a customers continued business with a company. We also found that most companies appear to be unaware In other words, as consumers continually reevaluate their choices of of these relationship junctures and how their own actions are affecting providers takes yet another puzzling turn, the rules of customer acquisition customers. and retention are changing again. By pointing todays analytic Satisfying customers, providing capabilities at yourself, you can more competitive pricing, offering help identify these blind spots and more compelling products, or even develop an understanding of the delivering better service are no longer behaviors, needs and expectations sure-fire ways to gain and lock in of individual customers at these customers. Todays unstable economic vital points in the relationship. In the conditions only add to this complex following report, Accenture provides picture as almost half of consumers a roadmap for change. We have profess that in the current context, divided the strategy into three steps they find themselves much more to help companies tip the balance of likely to be shopping around for the customer spending significantly in best dealeven if it means leaving their favor, on their journey to high current providers. performance.

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Admitting There is a Problem:

Under the Surface, a Relationship in Trouble.

Many companies are not attending to the things that keep customers engaged, which is key to sustained growth.
Accenture has studied global consumer behavior and attitudes via this study for seven years. In late 2011, we surveyed more than 10,000 consumers in 27 different countries between September and October. To better understand these behaviors across industries, we asked respondents to evaluate 10 industry sectors (up to four industries per respondent) on issues ranging from expectations and purchasing intentions to loyalty, satisfaction, and switching. Our study revealed that, on the surface, providers relationships with customers appear to be on a solid footing. In fact one of the studys most significant findings is that customer satisfaction actually slightly increased in 2011. However, a closer look reveals consumers wandering eyes, as expectations and provider switching are also on the rise: loyalty at all. Furthermore, two-thirds of consumers switched providers in at least one industry in the past year due to poor customer service. And the satisfaction bar keeps rising: Forty-four percent of consumers said their expectations today are higher than they were just a year ago (Figure 2). Such contradictions are even more pronounced in emerging markets. In these countries, consumers reported greater customer satisfaction than their mature-market peers across all service characteristics. But consumers in emerging markets more often switched providers due to poor service across all industries (in some cases by a 2:1 ratio over mature markets), especially within the Retail, Internet service providers (ISPs), Wireless/cell phone providers and Banking industries. Adding to the paradox, 59 percent of consumers in emerging markets (compared with 31 percent of those in mature markets) said their expectations had increased in the past year, and this rise was seen across more customer service characteristics in emerging markets than in mature ones. Our results reinforce what many consumer businesses are increasingly discovering: that stated satisfaction doesnt equal loyalty; and even willingness to recommend a product or service to peers doesnt in itself equate to growth in a customers business. In fact, our research found that in every single industry category, recommenders are more likely to shop around for better deals than non-recommenders. Therefore, while keeping satisfaction high remains importantno company can be successful with customers who are actively dissatisfiedit is not the only, or the ultimate, way to increase customer revenue. The apparent contradictions among satisfaction, switching, loyalty and expectations are clear indicators that providers must dig below their performance across their aggregate customer base. The digital age is actually making relationships more personal, and companies should work to deeply understand individual customer segments: what motivates them, whats important to them, and what they really want from the relationship with their providers. Failure to do so can make companies vulnerable to overlooking the critical interactions that matter most to consumers. These blind spots represent lost opportunities for providers to drive greater loyalty, engagement and ultimately revenue from current and potential customers.

While these results are troubling, companies shouldnt blame the customer. Consumers reported increased satisfaction As we probed more deeply into the research, we found the rise in satisfaction across each of 10 service characteristics was driven primarily by basic operational evaluated. In fact, satisfaction rates on improvementfor instance, reducing hold three customer service characteristics times on the phoneand not by elements jumped by more than five percentage that really stand out to customers. In other points from 2010 (Figure 1). words, companies rightly are improving But despite rising satisfaction, only an things that, if not fixed, will drive average of one in four consumers feels customers away. But theyre not attending very loyal to his or her providers across to the things that keep customers engaged, industries and just as many profess no which is key to sustained growth.

Todays contradiction: the digital age is actually making relationships more personal.

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Figure 1: Customer Satisfaction with Specific Service Characteristics

*Having the service experience match the promise a company makes to me upfront *The number of choices I have to receive service the way I want it
Very satisfied % change from 2010 Extremely satisfied % change from 2010

31% 28% 32% 31% 27% 29% 25% 23% 36% 29% 26% 23% 13% 12% 11% 10%

14%

General Characteristics

Having customer service available at convenient times Being able to access customer service using multiple channels Being able to resolve questions/issues on my own, without speaking to a service agent The amount of time it takes to read and understand information the company sends me The amount of time it takes to completely resolve my issue or problem The amount of time I have to wait to be served

14% 14%

(+0%) (+0%) (+3%) (+1%) (+2%) (+3%) 18% (+2%) (+2%) (+3%) (+3%)

(+3%) (+3%) (+2%) (+2%) (+2%) (+2%) (+5%) (+4%) (+4%) (+3%)

11% 10% 9%

Company Representatives

Having employees who are polite and friendly Having employees who are knowledgeable and well-informed Having customer service people who can deal with my issue without having to refer me to another person Having customer service people who know my history based on information I have previously provided, so I dont have to repeat myself each time I talk to someone

15%

Very satisfied

Extremely satisfied

*New items included in 2011 survey

Figure 2: Change in Customer Service Expectations as Compared to 12 Months Ago

Change in ExpectationsGlobal Sample 2011 2010 2009 2008 2007
8% 8% 9% 13% 12% 49% 51% 53% 56% 56% 32% 30% 30% 26% 27% 12% 10% 8% 5% 6%

2011Emerging vs. Mature Markets

6% 9% 36% 60% 43% 23% 16% 8%

Emerging Mature

Much/slightly lower

The same

Slightly higher

Much higher

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Start Paying Attention to Things that Really Matter:

The Blind Spots That Are Likely Undermining Your Relationship

Our study identified five potential blind spots over the course of the providercustomer relationship that could predispose customers to be more open to switching providers if given the right incentive. This tenuous loyalty could inhibit customer spending and impede company growth. Whats even more troubling is the fact that these blind spots exist despite companies significant efforts in the past decade to improve customer satisfaction and their understanding of what consumers want: Nice to Meet YouMissing the chance to set the right expectations at the onset of a customer relationship. You Dont Know Me AnymoreNot noticing more subtle changes that matter in customers need for recognition, special treatment and reward. Cheating HeartOverlooking signs customers are itching to switch. Are you Listening?Failure to offer consumers opportunities to engage with a provider. Trinkets Wont Save MeRelying on point solutions to satisfy and keep customers. Our research and experience tell us that companies that recognize and eliminate, or at least dramatically minimize, these blind spots are more likely to attract and retain customers and sustain business growth.

Nice to Meet You

Companies are missing the chance to set the right expectations at the onset of the customer relationship. Industry-specific switching behavior remains considerable, especially in emerging markets. In aggregate, two in three consumers switched companies in the past year in at least one of the industries covered by the survey due to poor customer service (Figure 3). The moment of acquisition should be a more significant event in the customer relationship for providers. The promise made to customers at the onset of their relationship sets the stage for their future

satisfaction and interest in staying with the provider. In fact, having the service experience match the promise a company makes to me up front rated as one of the most important areas of customer service (Figure 4). And yet the greatest service frustration consumers cited is a providers failure to deliver on the service experience promised up front. Companies are either consciously or, more likely, subconsciously making promises in prospecting and customer set-up they are unable to deliver consistently on throughout the duration of the relationship.

Figure 3: Switching Due to Poor Customer Service

Percentage who switched any provider in any industries due to poor customer service Global 2011 Global 2010 Global 2009 Global 2008 Global 2007 34% 36% 31% 33% 41% Did not switch Switched 66% 64% 69% 67% 59%

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Figure 4: Importance of, and Satisfaction with, Various Customer Service Areas
Level of Importance vs. SatisfactionGlobal Sample 5 4.5 4.5 4.4 4.3 4.3 4.3 4.4 4.1 3.6 3.3 3.2 3.2 3.1 4.1 3.5 4.0 3.4 3.9 3.5 3.6 4.0 3.4
A. Having employees who are knowledgeable and well-informed B. Having employees who are polite and friendly C. Having customer service people who can deal with my issue without having to refer me to another person D. The amount of time it takes to completely resolve my issue or problem E. Having customer service people who know my history based on information I have previously provided, so I dont have to repeat myself each time I talk to someone F. The amount of time I have to wait to be served G. Having customer service available at convenient times H. Being able to access customer service using multiple channels I. The amount of time it takes to read and understand information the company sends me

4 3.4 3

3.6

J. Being able to resolve questions/issues on my own, without speaking to a service agent K. Having the service experience match the promise a company makes to me up front

0 A B C D E F G H I J K L Importance 2011 Satisfaction 2011

L. The number of choices I have to receive service the way I want it

Consumers cited their greatest frustration as when the experience does not match the promise a company made to them up front.

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You Dont Know Me Anymore

Providers are not noticing more subtle changes that matter in customers need for recognition and reward. Our research shows a significant increase in the extent to which consumers want to be rewarded for being loyal and want specialized treatment for that loyalty (Figure 5). For example, two-thirds of consumers said they like it when they are recognized for increased business. An equal percentage like it when companies provide special treatment for doing more business with them. This is especially true in emerging markets, where more than 70 percent of consumers like it when companies provide them with special treatment for doing more business with the company. Expectations for specialized service as a reward for being a good customer has rapidly grown since 2009. Furthermore, customers increasingly expect customer service representatives to know more about thema 14-point rise from 2009 to 2011.

Consistent with consumers desire to be recognized and rewarded for their business, participation in loyalty programs across most industries has steadily increased from 2009 to 2011 (Figure 6). And yet only about half of loyalty program participants across industries said their participation persuades them to stick with the companies that provide the programs. The problem is that most companies only recognize major increments on their terms (i.e., increments they predetermine for their loyalty programs), not the minor increments that matter to customers. Herein lies the blind spot. Companies are failing to identify when a business pattern with a customer changes and respond accordinglywhether via their loyalty programs or some other mechanism. Such changes may be subtle to the company (not necessarily translating in short-term value) but meaningful in the customers eyes. Yet they go unrecognized and unrewarded, leaving customers feeling as if the company doesnt really care about their business. Companies would do well to pay attention to tremors as much as they attend to earthquakes.

Only about half of loyalty program members across industries said their participation persuades them to stay with those companies providing the programs.

Figure 5: Consumer Desire for Recognition and Rewards

Agreement with the following statements: Global I like it when a company recognizes me for doing more business with them Emerging Markets Mature Markets

5%

31%

64%

8%

67%

4%

62%

I like it when companies provide me with special treatment when I do more business with them

5%

30%

65%

6%

71%

5%

60%

Not at all (1, 2, 3)

Neutral (4, 5, 6, 7)

Strongly agree (8, 9, 10)

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Figure 6: Adoption and Effectiveness of Loyalty Programs

Loyalty program participation (at least 1 program) Retailers
34% 31% 31% 29% 26% 31% 29% 53% 52%

Persuasiveness of loyalty program to stick with provider (much & very much)
57% 54% 49% 57% 53% 55% 53%

45%

Wireless/cell phone companies

19%

45%

Internet service providers

46%

Banks

18%

43%

53% 50% 51% 52%

Airlines

14%

23% 24%

43%

Hotels

23% 24% 18% 23% 25% 22% 21% 20%

53% 51% 49% 48% 47% 41% 50% 51% 49% 49%

Home telephone service providers

Utility companies

11%

40%

Cable/satellite television service providers

21% 19% 13% 16% 14%

41%

Life insurance providers

2011 2010 2009

9%

51% 49% 44%

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Cheating Heart
Companies are overlooking signs customers are itching to switch. Aggregate measures of customer retention are an important metric for providers in any industry. After all, such measures offer a pulse on the effectiveness of investments in customer acquisition, customer relationship management, and more. However, our research shows companies that rest on their laurels with stable to declining customer defection rates may be missing important early warning signs of customer retention issues. One such sign is partial switching, which means a customer has stayed with companies he or she does business with but has added another provider. Partial switching is up in each of the 10 industries we surveyed (Figure 7). Some of those with the greatest change in partial switching year over year include wireless phone companies and retail banking and financial serviceseach up three percentage points from 2010 levels. For some consumers, working with a portfolio of providers within an industry may become the norm and not necessarily result in their defection from a current provider. For instance, retail banking experienced a one-point drop (from 16 percent to 15 percent) in complete switchingwhere the customer stopped doing business with a provider in favor of anotherfrom 2010 to 2011. Yet, partial switching was up three points (from 24 percent to 27 percent). But, in many industries, an analysis of a partial switching paints a different picture of customer movement from company to company as it provides early warning signs for customers who are about to switch away completely. It is important to note that complete and partial switching rates do vary largely by country, impacted by local market contexts such as regulations and competition levels.

Figure 7: Industry-Specific Partial Switching

I have stayed with companies I do business with but added another provider (Partial Switch) % change from 2010 Travel & Tourism Life Insurance Providers Consumer Goods Retailers Consumer Electronics Manufacturers Retail Banking/Financial Services Providers ISP Cable/Satellite Companies Landline Phone Companies Wireless Phone Companies Gas & Electric Utilities 19% 20% 19% 22% 19% 21% 30% (+1%) (+1%) 35% (+2%) 32% 27% (+2%) (+3%) (+2%) (+2%) (+2%) (+3%) (+3%)

Companies that rely on their overall retention rate as a key measure of effectiveness may remain unaware of customers who have partially switched, potentially leaving the company unable to respond until it is too late. On the other hand, companies that use analytics to identify switching trigger points increase the likelihood of being able to address those issues and mitigate the risk of partial switching. Agile companies also use analytics for more than just customer retention by identifying opportunities for growth through expansion.

Companies that look only to customer retention are likely missing important cues from partialswitching behavior.

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Are You Listening?

Organizations are failing to offer consumers opportunities to engage with them. Signs continue to point to the use and influence of social media. Over the past year, more than half of consumers used social media sites to gather information about a company (an increase of 6 percent from 2010), and usage is not limited to younger age groups. Posting on social media sites about companies, products and services is growing, and trust in those comments is increasing, as more consumers reported comments posted on social media sites influence their purchase decisions (Figure 8).

Propelled by these new channels, consumers expectations for personal interaction and engagement with providersespecially through social media is becoming a significant contributor to their choice of, and sustained spending with, a provider. A growing body of consumers wants companies to interact with them in social media environments even before they are customers, and they reported such interactions increase their engagement and their likelihood of doing more business with the provider. What is a truly surprising research finding is consumers desire for one particular form of engagement: contributing to a providers innovation agenda, something that one in five consumers globally said they have done in some way in the past two years either online (such as idea portals and providers discussion forums) or off line (such as focus groups or products trials). Consumers in emerging markets are particularly engaged in product and service innovationat double the rate of consumers in mature markets (Figure 9).

This trend likely will continue: One in four consumers is very interested in contributing to innovation efforts in the coming year and another two in five are somewhat interested (Figure 10). Companies that arent engaging with consumers (prospects, customers, and former customers) especially in areas such as innovationare letting significant drivers of loyalty go untapped. And even if they do engage consumers in innovation, some companies fail to adequately show consumers how their efforts actually contribute to new products or servicesthus leaving consumers feeling as if they wasted their time and their feedback is not valued.

Figure 8: Influence of Social Media

Trust, Influence and Use of Social Media2011 Global Sample % change from 2010 32% 29% (+5%) (+5%)

I tend to trust comments about companies/brands on social media sites posted by people I know (family, friends, co-workers...) Positive comments posted on social media sites contribute to my consideration of buying a given product or service Negative comments posted on social media sites contribute to my considerable of not buying a given product or service I like seeing companies get directly involved in contributing to discussion in social media environments The use of social media sites has increased my overall awareness about products and services from providers I did not know of before Comments posted on social media sites influence my opinions about companies or brands in general I am more likely to do business with a company that I know I can interact with in a social media environment

28% 27% 27% 25% 24%

(+5%) (+5%) (+7%) (+7%) (+3%)

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While fewer than one third of consumers had previously participated in innovation efforts for a company, more than half of consumers expressed interest in doing so especially those in emerging markets.

Figure 9: Consumer Participation in Innovation

Personal participation in innovation efforts for a company

online (idea portals, providers discussion forums, etc.) within past two years Yes offline (focus groups, products trials, etc.) within past two years Yes

20%

13% 29%

22%

15% 31%

No

80%

87% 71%

No

78%

85% 69%

2011 Global

2011 Emerging Markets

2011 Mature Markets

2011 Global

2011 Emerging Markets

2011 Mature Markets

Figure 10: Consumer Interest in Participating in Future Innovation

Interest in participating in innovation efforts for a company

online (idea portals, providers discussion forums, etc.) in the coming year Very interested offline (focus groups, products trials, etc.) in the coming year

23%

29%

17%

23%

27%

20%

Somewhat interested

39% 44% 49% 29% 24% 18% 10% 2011 Global 14% 2011 Mature Markets 25% 21% 11% 2011 Global 5% 2011 Emerging Markets 51% 47%

36%

Not very interested Not interested at all

29%

4% 2011 Emerging Markets

16% 2011 Mature Markets

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Trinkets Wont Save Me

Companies are relying too much on technology point solutions to satisfy and keep customers. Consumer expectations for the use of technology are growing steadilyso much so that, for many consumers, technology is simply table stakes in their customer experience. A majority of consumers (76 percent) reported the increased use of technology in sales and marketing (such as company email advertisements, online banners, Web tools to configure/compare offers and online ordering) has improved their experience. Similarly, most consumers (68 percent) said the increased use of technology in customer service (such as automated phone attendant, live Internet chats and self-service possibilities on a website) has improved their service experienceup 18 points since 2007 and on the rise each of the past four years. Consumers in emerging markets rated the impact technology has had on their experience even higher than their counterparts in mature markets (Figure 11). However, even for consumers who say technology has improved their experience (whom we refer to as technology-savvy consumers), other types of interactions are still critical. The spending of technologysavvy consumers is not necessarily swayed by a new application or technology point solution. In fact, technology-savvy consumers are not any more loyal to companies than those who dont believe technology has improved their experience. Furthermore, consumers who believe technology has improved their customer experience are actually more likely to be considering shopping around for better deals in their industry. This is especially true for financial services, retail, ISPs and wireless carriers.

Figure 11: Impact of Increased Technology Use on Customer Experience

Increased use of technology in marketing and sales practices has improved my experience of becoming aware, considering, selecting and buying a companys offerings Strongly agree 16% 35% Increased use of technology in customer service practices has improved the level of service significantly in the past five years

25%

23%

13% 34%

44% Somewhat agree 52% 51% 49% Somewhat disagree Strongly disagree 45% 47% 29% 19% 6% 2011 Global 24% 13% 4% 2011 Emerging Markets 8% 2011 Mature Markets 9% 2011 Global 22% 15% 4% 2011 Emerging Markets 14% 2011 Mature Markets

Technology-savvy consumers do, however, want greater engagement with their providers, especially by being involved in helping to drive companies innovation agendas. These individuals already are participating more in innovation by at least a 2:1 ratio over their counterparts who disagree about the benefits of technology. Perhaps more important, technology-savvy consumers also want to be much more involved than others in future innovations, by at least a 2:1 margin both online and offline. For companies, the lesson is clear: Relying on technology to satisfy and keep a large portion of customers is insufficient to gain their increased business. Keeping tech-savvy customers loyal and engaged is more complex and may reside, at least in some small part, in the fact that they assign greater importance to innovation opportunities when considering their future loyalty to their providers across industries.

Over two thirds of consumers said the increased use of technology within the marketing, sales, and service practices has improved their service experience; however, technology enhancements alone are not sufficient to acquire or retain customers.

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Dating in the Digital Age Around the World:

Rate the importance of technology higherboth for Marketing & Sales as well as for Customer Service than their counterparts in mature Where Emerging and Mature markets. For example, 81 percent of Markets Differ the Most consumers in emerging markets agree the use of technology in customer Consumers across the emerging service has improved their customer and mature markets we studied are experience compared to 57 percent remarkably similar in many aspects of of consumers in mature markets. their relationships with their service Are more likely to share negative providers. For instance, one in four customer service experiences with survey respondents, regardless of the friends and family: 92 percent told geographical market, say they trust people around them about a bad the companies with which they do experience (e.g., friends, family, business. Furthermore, about twocoworkers) compared to 81 percent thirds of consumers (in both emerging of those in mature markets. While and mature markets) say they like it fewer consumers use technology when they are recognized for doing to share a bad experience, a similar more business with a provider. And, difference between mature and regardless of market, consumers share a emerging markets exists. Thirty-six lack of willingness to trade-off aspects percent posted negative comments of product and customer service in about the experience online (e.g., exchange for lower prices. blogs, Facebook, Twitter) compared However, when dating around the to 22 percent of mature market world companies should be aware of consumers. some distinct differences between More frequently contribute to their consumers in emerging and mature providers innovation efforts. Three markets. Consumers in emerging times more consumers in emerging markets: markets have contributed online to a companys innovation agenda Are more inclined to switch providers in some way in the past two years due to poor service across all (29 percent of emerging market industries, especially within the consumers versus 13 percent of those Retail, ISP and Banking industries. in mature markets). A similar spread Have increased their expectations of exists between emerging and mature their providers more than consumers markets when considering offline in mature markets: 59 percent of contributions to innovation as well. consumers in emerging markets say their customer service expectations are higher now than they were 12 months ago, compared to 31 percent of consumers in mature markets.

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Page 15

Rekindle the Fire:

Taking Action Against Blind Spots to Shore up the Relationship and Spur Growth
The five blind spots represent potential impediments to customer growth and engagementwhich our research showed to be stronger overall predictors of anticipated spending patterns than satisfaction. Every company may be confronted with at least one of these blind spots, and some face multiple ones. Left unattended, these blind spots could chip away at customers positive perceptions of their providers, increasing the likelihood of switching. The good news is that blind spots dont have to remain a drag on companies pursuit of stronger customer relationships and growth. We have identified actions companies can take to help minimize or eliminate these blinds spots and, subsequently, improve their ability to attract new customers, retain existing ones, and grow more strongly and sustainably. untapped by providers today: Knowledge they have gained from other customers who have switched from the same provider. Understanding which provider a customer switched from, and why he or she switched, can help a provider avoid making the same mistakes and, instead, create a more satisfying experience. For example, customers switch Internet service providers for many reasons, including poor response from customer service agents, weak capabilities for online account management and inconsistent or slow connections. But even though a provider knows precisely when a customer switches to it from a competitor (which isnt always the case for other industries), most fail to take the opportunity to find out why the person switched. If, for instance, the company knew the customer switched because the previous providers Internet connection was consistently failing, it could reasonably assume what the customer expected of his or her new provider and make sure it met those expectations. loyalty programs in greater numbers, yet at the same time, they are not as important in keeping customers as in the past. Agile companies monitor customers behavior and purchases so they can easily spot when a particular customers business pattern changesand respond accordingly, using advanced customer analytics. Importantly, the magnitude of the changes should be viewed through the eyes of the customer and not the company. Whats significant and worthy of recognition to a customer may be only a drop in the bucket for the company. Thus its important to build a recognition program not from the companys perception of an increase in engagement or spending, but from the customers. Take, for example, frequent flyer programs in the airline industry. Theres a large step change from being a silver to a gold flyer, and for many customers its a long journey from one level to the next. In fact, many customers may increase their flying with an airline by what they believe is a significant amount, but it still may not be enough to get them entry into one of the elite levels. Thus, airlines could strengthen loyalty by recognizing their customers in smaller steps, which might entail, at a minimum, re-architecting their loyalty programs to consider smaller increments. By doing so they will better meet the recognition and reward needs of their customers, thus improving the customer experience and increasing customer retention.

Set the Right Expectations Upfront Using the Right Intelligence.

With switching on the increase, the customer acquisition and set-up processes are more critical than ever. This is when the promise made to new customers sets the expectations by which customers in the future will judge the experiences the company delivers. Yet our study found one of the things consumers are most frustrated with is a providers failure to deliver on the service experience promised up front. Companies must remember that retention begins the moment a consumer becomes a customerand consumer engagement even beforeand they must clarify expectations at the onset of the relationship. A powerful tool for doing so is intelligence largely

Recognize Customers in Increments that Matter to Them.

Customers increasingly are not content with having just a smooth purchase or service experience with a provider. While these are important, customers want more: They want companies to know who they are and reward them for being loyal customers (often in the form of specialized treatment, advance information, pricing reductions and promotion coupons). But traditional loyalty programs are far from enough. Customers are joining traditional

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Identify the Triggers that Signal Imminent Switching.

Companies of all types religiously track customer retention, and for good reason: It does no good to continue to attract new customers if they lose as many as they gain. But in relying on overall retention rate as a key measure of effectiveness, companies are vulnerable to not recognizing when a customer is about to leave until its too late. Agile companies dont place too much stock in their customer save performance. Rather, they continually look upstream for reasons existing customers remain customers and apply those insights to the broader customer base to minimize the situations in which the company will have to intervene at the last minute to keep a customer from switching. These companies seek to analyze price trade-offs customers are willing to make within a given context against all components of the offer, including product features, customer support services and ongoing communication efforts, in order to provide optimized pricing. Based on this analysis, they deploy differentiated pricing and proposition and contextual pricing strategies towards specific segmentsbalancing efforts required with customer valueto pro-actively influence retention, especially in uncertain economic conditions. Enabled by predictive analytics, leading companies also are adept at identifying the warning signs of partial switching that may indicate complete switching is not far away. Different indicators are used to detect partial switching, depending on the industry. For example a change in a customers market basket size or composition may be indicators of a partial switch in the grocery industry. Another clear trigger our research uncoveredfor an important portion of consumersresides in the social media channel. Postings on social media sites about negative experiences are on the rise. And once a customer has actually posted a comment about a negative experience online, theres

a very high likelihood that individual will switch to a new provider: In fact, 85 percent of consumers who posted negative comments ultimately switched providers in at least one industry. Companies that can monitor social media channels for negative comments and act on them will be better positioned to retain more of their customers business.

Eighty five percent of consumers who posted negative comments ultimately switched providers in at least one industry.

Provide Meaningful Ways for Consumers to Engage with the Company, Including through Digital Channels.
Social media is playing an increasing role in consumers purchase decisions. A growing number of consumersand not only younger onesare posting comments about products and services, trusting the comments posted by others, and reporting that such comments are influencing their purchase decisions. Boosted by social media involvement, consumers cravings for personal interaction and engagement with providers are growingand becoming a significant factor in their choice of, and spending with, a provider. One particular form of engagement, contributing to a providers innovation agenda, is highly valued by consumers. Leading providers interact with consumers via social media and engage them in areas such as innovation to tap into significant drivers of business growth. For instance, some companies are using online crowdsourcing platforms to encourage consumers to give suggestions for new offerings, particularly in retail and consumer electronics industries. Others have created sophisticated online communities through which they enable customers to interact with the company and each other on issues meaningful to them. Still others provide ways for consumers to test drive prototypes of new offerings and give feedback on their performance. These and other methods of engagement are extremely valuable to consumers, and companies that offer them are more likely to become customers preferred providers.

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Page 18 | Accenture 2011 Global Consumer Research Study

Conclusion
Times have changed greatly in the past decade, especially when it comes to the relationship between customers and providers. As our research shows, in this digital age, more information is moving at an even greater speed and is driving the dynamics of the relationship. In particular, it highlights those specific areasblind spotswhere customer expectations remain unmet and are keeping companies from driving significant business results. By tackling blind spots when and with whom it matters the most, companies can help capture lost opportunities, make significant advances in customer engagement and loyalty, and generate sustainable growth. Eliminating or minimizing these blind spots likely will require new and, perhaps, different capabilities from the ones companies rely on today to manage customer relationships. For instance, advanced analytical tools that can make sense of a wide range of data (old and new, combined and integrated) and make it usable by the business are vital to identifying and acting on moments of change within the customer relationship. As mentioned, a next generation of loyalty programs that are tailored to specific customers or segmentsor new ways of recognizing and rewarding customers outside of such programscan strengthen customers connection to companies. Processes that enable a company to integrate open innovation with its traditional product development function can bring more customers into the fold and increase customers emotional attachment to its products and services. And greater collaboration among marketing, sales, customer service and research and development (R&D) can enable a company to develop strategies that maximize the performance of the customer, not individual functional silos. For consumer businesses, reorienting traditional customer relationship management practices and dispelling some long-held beliefs about what matters to consumers is not easy. And it will require significant change for many companies. But, as our research has found, making such adjustments may be necessary for consumer businesses to achieve success and high performance in this new reality of dating in the digital age.

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Contact Us:
To learn more about Accentures Global Consumer Research or CRM solutions, please visit Accenture.com/crm or contact one of our senior managing directors: Robert Wollan +1 (612) 277-4660 robert.e.wollan@accenture.com Chris Allen +1 (720) 359-5743 christopher.j.allen@accenture.com

About Accenture CRM Solutions

Accentures Customer Relationship Management service line helps organizations achieve high performance by transforming their marketing, sales and customer service functions to support accelerated growth, increased profitability and greater operating efficiency. Our research, insight and innovation, global reach and delivery experience have made us a worldwide leader, serving thousands of clients every year, including most Fortune 100 companies, across virtually all industries.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with approximately 236,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011.

About the research

In 2011, the seventh year Accenture has conducted this particular survey of consumer behavior and attitudes, more than 10,000 consumers in 27 different countries were surveyed via the internet between September and October. To better understand behaviors and attitudes across 10 industries (each respondent could answer regarding up to four industries), we asked about issues ranging from expectations and purchasing intentions to loyalty, satisfaction, and switching.

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