Churn is costing Aussie businesses AU$1.5 billion a year, according to a new report, with telecoms companies hardest hit.
"Switching suppliers is a national habit for Australians, and it's on the rise," the report by BMC says, with six out of ten Australians switching suppliers for a service in the last 12 months.
The BMC study says that since the younger generation (25 to 34 year olds) who are the most likely to churn — switching 50 percent more often than other age groups — churn rates are set to grow.
Along with the young, high earners are also quick to ditch one company for another. People earning AU$130,000 and above churn the most, switching 1.35 services in the last 12 months, according to the report, compared to 0.95 for those earning below AU$30,000.
Over the last 12 months, the industries experiencing the most churn in Australia have been telephone companies at 19 percent churn, mobile phone companies and electric utilities with 17 percent churn, broadband suppliers at 15 percent churn and insurance companies at 12 percent churn.
Price is the biggest driver for churn in Australia, according to the report, with lack of reward for staying with a company taking second place. Supplier inadequacy when faced with a service problem came in at third place, while leaving the company because of a service problem itself was the fourth most popular reason for churn.
When asked what would make them stay with the one company, keeping price low was named by 87 percent of respondents. On a patriotic note, 75 percent of respondents said they would be loyal if call centres were kept in Australia, and 69 percent said having call centre staff aware of their service history would keep them loyal.
For telcos, the report found that customers wanted more problem prevention.
Since the 80's business have been abusing brands, lowering customer service standards and relying on customer apathy all in the name of greater profits.
It was only a matter of time before customer loyalty would become a thing of the past and now we have a whole generation who see no reason to be loyal. With increasing goverment legislation against lock-in practices, current CEOs are now reaping what their greedy predecessors have sown.