Bad biz management costing billions, says ServiceSource
Inability to connect with customers and bad data adding to costs
By CFOWorld.co.uk staff | CFO UK | Published 09:30, 16 November 12
‘AWOL’ customers are costing businesses US$1.4 billion according to research conducted by recurring revenue management solutions provider ServiceSource.
In a new report published earlier this week, it noted that 54 percent of customer non-renewals in the EMEA region were due to an inability to connect with customers. The combined effects of bad data and a lack of loyalty were seen hitting the region harder than competing markets.
Globally, such ‘non-responsive’ customers were branded by ServiceSource as the top reason for customer loss, accounting for 45 percent of non-renewals. However it seems this is an issue felt most strongly in the Eurozone.
The report from ServiceSource analysed over US$1.4 billion in lost revenue from more than 50 companies globally, spread over the last two years. Estimates from industry research firm Gartner put the total figure lost due to inadequate data management and processes at US$30 billion.
Martin Moran, managing director (EMEA) at ServiceSource commented, “With potential lost revenue worth billions up for grabs, if EMEA businesses focused on implementing strong data systems, and building loyalty through effective relationship management – they would outperform competitive regions in almost every area.”
When it comes to keeping in contact with customers, Asia outperforms EMEA by 14 percent, resulting in customers being four-times more likely to upgrade through a current vendor than to a competing product. Asia does however have its own regional issues, including weaknesses in communicating cost-benefit propositions to existing customers, ServiceSource said.
The region loses approximately 24 percent of business through ineffectively communicating a service’s value. EMEA stands at 14 percent, outperforming both Asia Pacific and the US.
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