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Bad customer experience is not the most important reason for consumers switching brands, research finds

Customers switch brands when they are attracted to someone new

Almost two-thirds of consumers (62%) who switched brand in the past 12 months did so because brands successfully attracted them, rather than bad customer experiences pushing them away.

In addition, 61% of consumers surveyed stated that they switched brand at least once in the last year, across the categories included in the survey.

That’s according to the new ‘Customer Engagement: Acquisition and the Consumer Mindset’ report from the Data & Marketing Association (DMA), in partnership with Paragon.

When looking into different industries, ‘Automotive’ and ‘Supermarkets’ show the highest percentage of customers willing to switch brands due to the lure of new opportunities, with 70% and 68% of customers stating this.

In fact, just the category of ‘Banking’ (specifically for current accounts) found previous poor customer experience to be an equally decisive factor for the switch, where it was a 50-50 split. Suggesting that most switching customers are enticed into new relationships most of the time.

“A key area of interest for our latest research is what factors have influenced the customer to switch to a new provider. In general, consumers believe that they switch because of the attractiveness of a new provider rather than the lack of service from the existing supplier,” says Scott Logie Chair of the DMA Customer Engagement Committee. “Given the efforts made to make switching product or service providers easier for consumers, you would think that the opposite would be true.”

Nick Barbeary, Client Development Director, Paragon Customer Communications adds: “Whichever channel and for whatever reason people want to switch, you still need to make your communications timely, relevant and motivating, creating consumer trust by offering them a genuine benefit. In a crowded ‘always on’ media landscape it’s difficult to assess where to deploy your resources, but the sheer variety of channels ensures that you can now put the right message in front of the right person at exactly the right time.”

What drives customers to try new brands?

The report also highlights key differences between the drivers for consumers trying an established brand for the first time, to those trying a start-up or new brand.

Consumers see a brand being ‘Genuine’ as more important in encouraging them to try a start-up vs. an existing brand they haven’t tried before (31% vs 17%). ‘Innovativeness’ (25% vs 20%) is also important, along with more emotional drivers, such as ‘Reflecting a consumer’s values’ (17% vs 13%).

In addition, a ‘Free trial’ or ‘Money-back guarantee’ is particularly attractive as an incentive to try a start-up (35% vs 29%); with a new reputation or new product, consumers may see this as a risk-minimising incentive.

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