Churn: Poor customer service to blame

Poor customer service is the main reason customers choose to switch companies but IT can be used to improve the situation.

New research suggests service issues are more likely to cause customer churn than any other factor, with poor problem-handling the biggest culprit.

Professor Robert East, expert in customer behaviour at Kingston Business School, said companies need to find ways of providing better service. "Technology is often the answer," he said.

Customer-facing technology needs to become more sophisticated to deal with recurrent issues more quickly and solve problems more efficiently, according to East.

He added that businesses need to "focus on technology that actually delivers satisfaction to people".

East said: "[Customer churn] comes down to two things. It's money and it's service."

Peter Armstrong, corporate strategist at software services company, BMC - which commissioned the research - agreed that giving customers access to IT is a good way to reduce churn.

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He said: "[Consumers] hate being kept in the dark about problems."

Insurance, utility and mobile companies suffer from the highest churn rates according to the research.

The findings come from the BMC Churn Index which consisted of surveys with more than 1,000 UK consumers.