Tuesday, March 10, 2009

Silent Customer Attrition

Andrea Ayers reviews some fascinating survey data at Forbes.com today. She provides results from survey research regarding customer satisfaction. Her results indicate that CEOs think that their customers are far happier than they really are with their companies' service. Ayers speaks at length about what she calls "silent attrition" - i.e. those customers who leave without ever telling a company why they have chosen to stop doing business with them. Ayers reminds us that even those customers who express "satisfaction" with a company's service are not necessarily loyal.

Anne Mulcahy, CEO of Xerox, once touched on this issue of "silent attrition" in a speech she made about her firm's customer service efforts. Mulcahy said:

“There has been a norm around for many years that somewhere around 75 per cent of customers who defect say they were "satisfied." Our own research bears this out. When our customers tell us they are “very satisfied," they are six times more likely to continue doing business with us than those who are merely satisfied… If you're just providing your customers with service that's good, they're probably just satisfied. This should set off alarm bells. Take the automotive industry. Satisfaction scores average around 90 per cent. Guess how many people repurchase from the same manufacturer? Only 40 per cent.”