Customer churn costing Australian business $1.5 billion a year

Consumers in 25-34 age bracket switch often

However, the index found that in the last 12 months other sectors have been playing catch up, with the top five churners being: telephone companies 19 per cent; mobile phone companies 17 per cent; electric utilities 17 per cent; broadband suppliers 15 per cent; and insurance companies 12 per cent.

"If the churning habit goes unchecked then suppliers could see the average lifespan of a customer lasting little more than six months, which would make a mockery of customer lifetime profit, and return on the cost of customer acquisition models," according to the index findings.

BMC Software A/NZ managing director, Mike Davies, said the study highlights the fundamental importance of efficient, effective management of IT infrastructure and business processes that underpin customer services.

While technology systems that help to quickly identify and resolve problems are important, Davies said the real measure of IT's effectiveness is from the outside in and the quality of service from the customer's point of view.

"Unless business have the systems and processes in place to fix those service problems quickly, sensitively and proactively, they'll pay the ultimate price of losing that customer."

Gartner's 2007 annual CIO survey also identified customer retention strategies as the number one priority for CIOs through to 2009.

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