Which Industries Do Customers Remain Loyal to During a Move?
Even though it can be an exciting and happy experience, moving is still ranked as one of the top 5 most stressful life events. On the one hand it can be a fresh start, but on the other it involves many changes in established routines. It’s also a great time of risk and opportunity for brands across industries. With a move many customers see a chance to break away from current providers and take their business elsewhere. This is a risky time for companies who know customer retention is more cost effective than acquisition, but a great opportunity for competitors looking to pick up some new business that’s primed to be lured away. While customer churn due to moving is a reality across the board, there are some industries that are at higher risk of being abandoned than others. Epsilon recently released their 2016 New Mover Study which sheds light on some of these “at risk” industries.
The report found that
- 68% of new movers switched grocery stores (however more than half of those were with the same brand, but different location)
- 86% of new movers switched to a new pharmacy/drug store. 65% of these changed brands completely and 38% stayed with the same brand, but different location
- 25% of new movers found a new physician and 12% were currently looking for one
Additionally, a similar report done by Epsilon in 2012 found that
- 27%-30% of new movers changed internet and television providers
- 21% of new movers changed homeowners insurance
CDC/NCHS National Vital Statistics actually ranks moving, which they refer to as “displacement” as the 2nd of the top 4 reasons that people leave their financial institution. The group contends that 30% of a bank’s annual customer attrition is due to current customers moving.
But can you really blame moving?
Yes, these statistics are shocking, but- to play devil’s advocate- shouldn’t true brand loyalty be able to withstand factors such as moving? For smaller companies with a singular location it’s understandable, but for brands with multiple locations and digital service providers a move shouldn’t affect a truly satisfied customer. Especially when movers are already undergoing so many forced changes, one would assume they would want to remain with a brand they know they can trust.
Instead of accepting attrition rates due to customer displacement as fact, companies should look at their customer journey and hone in on gaps in service and satisfaction to figure out why their customers aren’t remaining loyal when faced with a move. According to Bain & Company it’s worth it – a 5% reduction in customer churn can increase profits by 95%. But how important is customer experience really?
Some companies may say at the end of the day a competitor with a shiny new offer and lower cost will always win out, but studies show this isn’t true. According to Accenture, it isn’t price that reigns supreme- it’s service. In fact, one study found that 64% of consumers switch from at least one provider due to poor customer service each year. Brands that want to hold onto their current customer’s business, even during a move, need to step up their customer experience before it’s too late.
Shouldn’t true brand loyalty be able to withstand factors such as moving?
The other side: their loss is your gain
On the other side of the situation, companies who can step in at the opportune moment when consumers are actively looking to be courted by a new brand can ramp up their customer acquisition. Research shows that 71% of major move-related purchase and vendor changes happen in the two months prior to and right after the move, so timing is key. Depending on industry, the biggest influence factors for these decisions are visiting companies or businesses in person (43%), internet research (22%), and friend and family recommendations (10%).
Since consumers are inclined to check out new brands online, it’s important to establish a multi-channel approach that reaches out to new movers with custom, relevant offers through the channels they’re most apt to engage on. Sixty-nine percent of new movers actually enjoy receiving direct mail offers related to their recent or upcoming move, and 44% find emails with move-related information to be helpful. The key is understanding your new mover prospects and using a marketing list that can target not only by the mover’s demographics, psychographics, and other characteristics, but by the stage at which they’re at in the moving process (whether the pre-move, the 6 weeks leading up to moving day, or right as the move happens).
Whether trying to retain customers during a move or targeting your acquisition strategy on displaced consumers, new movers are both a risk and opportunity for many brands. It just takes the right messaging and customer experience to make it count.