In my youth I recall Spock talking about Vulcan logic on Star Trek. I do wonder what he would have made of consumer logic in the 21st century ?
Here’s ONE scenario, you’ve been on a good dual fuel tariff for gas and electricity for a number of years but decide you fancy a change.
Why ? You fancy a change . Your current provider hasn’t done anything wrong to you. You just fancy a change. There is no logical reason for changing.
Research shows that 7% of customer are natural floaters. So you’ll lose at least 7% of your customer base each year for no obvious reason.
In another scenario, customers seem very reluctant to change their current account provider. In fact research suggests we are more likely to change our partner than our bank.
In the UK in the1980s low switching rates fostered complacency amongst the big four banks. They mistook low turnover to be an indicator of high satisfaction, whereas it was in fact customer apathy based on the fact that the banks were all as bad as each other when it came to service.
However, when First Direct entered the market with a new model based on 24 hour telephone banking, some customers did take the plunge. I remember being told once that a definition of a loyal customer is someone who hasn’t yet found a better alternative. This sums up the First Direct scenario.
1)You’ll lose 7% of your customers anyway. Anything above that suggests you are doing something wrong
2)Don’t confuse customer apathy for customer satisfaction