Matt Peoples

How Customer Loyalty Varies by Industry

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We’ve all experienced bad customer service at some point. This could have been online, in person or over the phone. So why do some industries fall short of our service expectations much more often than others? And why are customers more loyal to certain industries?

Aspect’s 2018 Consumer Experience Index showed that customers are more likely to be loyal to companies that do business online as well as those that are in the travel industry. On the other hand, customers are less likely to be loyal to physical retail stores and cable companies, which is mainly due to good and bad customer service. Let’s take a deeper look at why customer loyalty varies by industry.

The Difference in Communication Channels

The usage of self-service channels continue to rise, which means that companies must create a great experience for all of their digital contact methods. According to the Consumer Experience Index, 45% of consumers said the most important aspect of their customer service experience is the ability to connect on their preferred channel. This can obviously be an issue for physical retail stores because they usually do not have dedicated employees to handle each channel, and there are not any self-service channels available inside the stores. Usually, the best way to get answers in physical stores is to talk with a store employee. Online businesses tend to have a much wider variety of ways consumers can reach out to customer service. It can also be done at any time, whereas physical stores are restricted by their hours of business. Dedicated agents and self-service channels are available to help online customers whenever they need it, which solves customer issues faster and more efficiently.

The Products or Services that Are Being Sold

The products or services being sold in different industries can also affect consumer loyalty. For example, we’ll take a look at the cable industry. Cable providers are all basically selling the same thing (access to the same TV channels, internet access, phone access, etc.), but for most families or businesses, cable is essential to have. This creates a situation where price plays the biggest role in which customers will choose to do business with. Consumers will often switch providers if a new company can give them a better deal. Since consumers are generally paying for access to cable, internet and/or the phone, the end product is basically the same. Other industries, such as the travel industry, tend to have higher customer loyalty rates. Customers tend to be more loyalty because personalized experiences are important in this industry, as are reward programs. These factors give consumers valuable incentives such as travel points, free upgrades and frequent flyer miles, so they tend to use the same companies.

Customer Service Agent Availability

More than ever before, consumers want and expect their problems or issues solved quickly when they contact customer service centers. Industries that are able to solve customer issues efficiently with little effort will most certainly have more loyal customers. Online retailers generally have dedicated customer service agents available at all times in addition to self-service channels that customers can use, such as direct messaging and chatbots. In order to create the best customer experience, brands should have a strategy to bridge the gap between self-serve channels and the ability to speak with a customer service agent over the phone. This is the optimal customer communication strategy, no matter what method of contact the customers prefer. Industries with lower customer loyalty rates, like the cable industry, can’t always solve their customers’ problems through digital channels or over the phone. For example, if a technician is needed to fix customer equipment or cable/internet lines, the time it takes for a resolution can extend far past what the consumer is comfortable with.

Purchase Frequency

Customer loyalty rates are affected by how often consumers return to purchase additional products or services. The consumables industry has a much higher customer loyalty rate compared to the fashion industry because products within the fashion industry tend to last much longer, making repeat purchases unnecessary. Going back to the cable industry, this also applies as many consumers only purchase cable services once in a long while, and since the cost is stable month over month, don’t see the need to shop for new services. In the travel industry, purchases are made often, especially for those who travel as part of their job.

Customer loyalty is greatly affected by customer service, the ability to offer solutions across multiple channels and the ease to which customers can get the answers they need. Companies that rely on discounts, pricing and promotions usually have less loyal customers because consumers likely choose providers that have the best deal they can get with their money. In order for customers to be loyal, they need to have positive experiences and feel valued by the companies they choose to do business with.

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