New Data Shows Post Pandemic Impact of Customer Loyalty Resulting in Increased Likelihood to Churn from Poor Service

TechSee’s new research explores the impact of the pandemic on customer loyalty across the customer service industry

TechSee, the market leader in Computer Vision solutions for customer service, released the results from its 3rd annual State of Customer Loyalty and Churn, the 2022 Edition. The report focuses on the impact of the pandemic on consumer behaviors with the key findings showing a significant loss of product-dependent brand loyalty. The data, based on a total of 2,706 completed survey responses from a nationwide sample of U.S. adults, shows that more than one in three US customers lack brand loyalty, with 38% of respondents stating they did not feel any loyalty to the brand and switched to a competitor after being approached.

Today, consumer loyalty is most impacted by the customer experience and overall service quality. Because of this, poor customer service experiences have increased the impact on churn. According to TechSee’s survey, 43% of customers switched products or canceled a contract due to poor customer service in 2022. This is a 10% increase compared to the 39% of customers who said the same thing in 2019, pre-COVID.

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The data shows a growing intolerance for poor service quality. Customers expect high quality experience as part of their purchase. As a result, companies who fail to deliver will face customer retention struggles as the market shifts to experience-led growth. Reducing customer churn is essential, with even slight fluctuations impacting profit margins significantly. Additional research published by TechSee earlier this year revealed that 67% of U.S. customers are not satisfied with the service they receive. However, these frustrated customers are hungry for innovation that enables better service delivery. They are open to embrace technology including submitting pictures (63%), using AI (73%), and receiving visual guided instructions (65%) in order to receive faster resolution.

Other key survey findings from the report include:

• 80% of customers churned due to dissatisfaction with service quality. Customers reported that a single negative service experience (21%), or ongoing dissatisfaction with service quality (59%) as the reason they left.
  
  
• The #1 driver of poor service is broken cross-channel flows. Customers churn after having to repeat themselves multiple times when speaking with multiple representatives (31%) or moving between service channels (14%).
  
  
• The majority of customers would only change their mind about leaving if the company offered them a discount (36%) or an upgrade at no extra cost (40%). This can make reactive retention strategies very costly.

Amir Yoffe, COO and Co-Founder of TechSee said: “Sharing our new report on the state of customer loyalty should be an eye-opener for companies to focus on experience-led growth. Today, customers are less forgiving than they’ve ever been when it comes to cumbersome customer service.” He added: “Our data shows that broken omnichannel flows are the number one driver of churn from poor service, something which can be easily fixed with the right processes and technology. Subpar experiences, such as customers having to repeat themselves when speaking with multiple representatives are still damaging loyalty, reputation and revenues for many great businesses.”

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