Why Customers Switch to Other Companies

Customer Focus Engineering

Why Customers Switch to Other Companies

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If you guessed "Price", you couldn't be more wrong. In his book, *The Customer Driven Company", Richard C. Whiteley, references this study of why customers switch companies. As the graph below shows, 69% of people surveyed said they switched companies because of service related issues. Only 18% and 13% respectively, said they switched because they found a better price or a better better product. (pp. 9-10, Perseus Books, 1991)

As the cost of customer acquisition far exceeds the cost of keeping customers, companies can dramatically increase their market position, and their bottom line, by using "voice of the customer" input to drive their policies and processes toward higher customer retention rates.

Customers will choose a lower price if they
perceive no difference in quality or service.
However, when presented with a demonstrable
difference, most customers will select quality
and/or service over a lower price.