Better leadership and service could help brands retain customers

In what is a vital part of customer retention especially at a time when all brands are desperate to keep their customers happy two studies this week show that companies are losing customers due to poor customer service and leadership reputation.

Mindi Chahal

Exclusive research by Accenture shown to Marketing Week reveals that 85 per cent of the 3,500 UK consumers surveyed agree that their loyalty could have been maintained if companies had done more to keep them.

Of those, 69 per cent would have stayed if problems were resolved the first time and 55 per cent if they had been offered rewards for their continued business with a company.

In the same week, the second annual Ketchum leadership communications monitor, a global study which polled 6,000 people in 12 countries on leadership, communication and the link between them, reveals the effect of leadership reputation.

The study shows that poor leadership communication is directly affecting corporate performance and sales. In the past year, 60 per cent of people stopped buying or bought less from a company due to poor perceptions of the behaviour of those in charge. Leadership failure also hits the bottom line far harder than good leadership enhances it.

Poor leadership perceptions led 51 per cent of respondents to buy less of a firm’s products and services, and 44 per cent to boycott it – while positive leadership perceptions prompted only 36 per cent of respondents to buy more and 42 per cent to start buying.

Failing on these two counts has a detrimental effect on loyalty. The ability to deliver customer service may differ depending on the size of the company and the number of customers but what is important is having these measures in place to be able to represent your brand effectively. The power of social media is an example that is often used to explain how quickly poor customer service or a company behaving badly can spread.

If customer service is up to what consumers are expecting of the brand and if companies show good leadership it could improve customer retention. Further to this it provides a platform to understand those loyal customers beyond the grumbling and complaining.

This might sound like a simple statement to make but as the research shows companies are still not getting that right.

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