Advertising should not be used to drive choice, claims study

Only 2% of respondents trust advertising the most as a source of information when choosing a product or service, according to a study by customer experience specialists Satmetrix.

The study claims that that companies are wasting billions on attracting new customers through advertising whilst delivering a poor customer experience that has forced over 10 million consumers to switch suppliers in the last six months.

The main culprits for this switching epidemic are unfair fees or charges, poor product or service quality and rude or disinterested employees. Satmetrix does not name any brands in its findings.

Instead of advertising, Satmetrix says that almost half of consumers (49%) see personal recommendations from friends, family or colleagues as the most trustworthy source of information. And, over seven times as many people (15%) trust consumer opinions posted online than trust advertising.

The second most common reason for switching (22%) is poor product or service quality. Almost as many (19%) people leave because of rude or disinterested employees. And, 12% move because they can’t get anyone to deal with their problem.

Deborah Eastman, CMO at Satmetrix, says: “Business choices that seem to make sense from a financial point can negatively impact revenue and reputation if consumers don’t think they’re fair. If companies drop these bad profits, they will likely recoup lost revenue many times over by keeping their customers for longer and acquiring new ones through recommendations.”

“It seems that many organisations chose to invest in attracting new customers through advertising rather than invest in a good customer experience that creates loyalty. If companies listened more to their customers, and if employees could understand the impact of their behaviour by seeing customer feedback for themselves, then businesses could significantly reduce churn.”

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