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New Survey Shows Bad Experiences and Low Switching Costs Resulting in Nearly 50% Customer Churn
In its 2022 CRM Impact Report, SugarCRM has found that the average customer churn rate is 32% globally and a staggering 47% in the United States.
Moreover, 60% of respondents report that churn rate has been increasing over the last 12 months, yet less than half have the ability to manage and quantify this churn.
Unsurprisingly, respondents believe that poor experiences are the primary cause of this churn. From the release:
Seventy-one percent of respondents suspect customers are leaving due to poor customer service or experience. Likely, this is why 70 percent of respondents said they need to do more to improve customer trust in their brand / organization and why 73 percent underscored the need to act on customer feedback for improved customer service and experience.
Over half – 55 percent – admit to not being able to identify customers at risk of leaving and 57 percent say they struggle to track customer churn rates effectively.
Implicit in this data is the fact that switching costs are so low that there is little to stop dissatisfied customers from changing providers, increasing the need for better data to manage the experience and identify at-risk customers.
“Companies face a daunting scenario – struggling to fill the top of the funnel with qualified leads while losing customers at the bottom of the funnel,” said Craig Charlton, SugarCRM CEO in the company's press release. “A key contributor to losses on each side of this equation is a lack of data. Data fuels the actionable insights that sales, marketing, and service teams need to act decisively at every critical touchpoint – to drive high-definition customer experiences – and to reverse the Great Customer Resignation.”