What is the Cost of Poor Customer Service?

Poor Customer Service
Poor Customer Service Effect

Dissatisfied customers are, unfortunately, an inevitable fact of business life. How you respond will determine whether the customer shares on social media how terrible your customer service is or will remain loyal to your company. Lots of brands have gone out of business because of poor customer service. More than ever, customers want to be treated with respect. According to the report Customers 2020 by Walker Information in collaboration with Customer Think and the Chief Customer Officer Council, by 2020 customer experience will overtake price and product as the key brand differentiator.

In this article I will highlight the main reasons why customers leave dissatisfied and will unfold unpleasant facts about the impact of poor customer service on the brand. On the below infographic you will see valuable statistics from NewVoiceMedia and ClickFox about poor customer service effect on the business:

poor customer experience
What happens after poor customer experience

The price of not listening is high

“You learn when you listen. You earn when you listen—not just money, but respect.” —Harvey Mackay

You can have an exceptional product, however, if you fail to consider how it fits the needs and requirements of your customers you will lose your business. Not listening to your customers is one of the biggest mistakes businesses have ever made and it may lead to the following consequences which may be in some cases irreversible:

  • angry customers
  • lost business
  • damaged reputation

Low Morale

Not listening to customers is not the only mistake which may have irrecoverable effect on your business. Inefficient customer service when most part of time is spent arguing with customers will also lead to unsatisfied customers. Treating customers without any respect and leaving their issues unresolved is the fastest way to become “famous” for the most terrible customer service.

In order to satisfy customers, companies have to keep up with the latest technological advances and train their staff or suffer the consequences. By introducing an efficient customer service strategy your business will have not only positive feedback but will also earn trust and customer loyalty.

Instead of complaining your customers will reveal the truth publicly

Social media is growing in popularity as an avenue for frustrated consumers to talk about their customer service experience publicly. Instead of contacting the company directly and complaining your customers will go to the masses and share what they think about your brand.

When you do not receive complaints this also does not mean all your customers are happy. According to Lee Resource for every customer complaint there are 26 other unhappy customers who have remained silent. Your customers’ silence is deadly for your business not only because you have lost the lifetime value these customers bring to your business but because of the impact these customers have on your potential prospects. When your customers complain they give you a unique opportunity to fix the issue and do whatever you can to win those customers back and prevent that issue from happening in the future.

An ability to post complaints empowers your customers to make your company better. Whenever you put all your efforts into providing a fast resolution to any complaint, you satisfy your customers’ needs and let them become your brand evangelists.

The Bottom Line

Poor customer service has a negative impact on any type of business. However, small businesses which rely on repeat sales and positive feedback for their success are affected most of all. While large corporations can exist with this and have new customers instead of those who have left, small companies will lose their market share. So what happens to companies which deliver poor customer service?

  • Loss of loyal customers
  • Loss of potential customers
  • Loss of profit
  • Loss of reputation
  • Loss of employees

“3 R” Rule: Responsibility, Resolution, Respect

If you do not want your business to be among those companies which lost their customers and reputation due to poor customer service then your goal must be to use every service problem as an opportunity to impress the customer. When mistakes happen, use proactive recovery as the means to create customer loyalty. Here are some useful recommendations which will help you not only deliver great customer service but also go an extra mile and exceed your customers’ expectations:

  • If you made a mistake do not be afraid to take responsibility and provide a fast solution. A proactive approach in this case and efficient customer service will help to solve the issue and win customer’s loyalty. And such little things as a sorry note, present or additional discount will form a positive rather than negative customer experience.
  • Offer a quick resolution to any complaint, do not leave negative feedback or complaint unresolved.
  • Treat your customers with respect. Train your customer care team to treat each customer with respect and take into account all their needs and requirements.

If you have got examples of poor customer service or recommendations to those companies which would like to improve their customer service, you are welcome to share your ideas in the comments to this blog post.

Olga
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Olga

Head of Customer Service Advocates and Social Media Coordinator at Provide Support, LLC
Olga is a Head of Customer Service Advocates and Social Media Coordinator at Provide Support, LLC. She is a writer and blogger on customer service innovation, customer service excellence and customer support technology.
Olga
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19 thoughts on “What is the Cost of Poor Customer Service?

  1. I need help responding to my CS reps that complain loudly when customers add non-standard work requirements. Additional forms or uploads , color or no color on invoices- etc. can be somewhat petty but the customer writes our paycheck. Any words of wisdom? Can you elaborate on your comment “take into account all their needs and requirements? always?

    1. Thank you for your comment, Kit. Let me also ask you – is this something that takes much time and effort or your CS agents just do not want to do the job they think is out of their scope? If this is smth they can easily do then why not? Your customers purchase on your store and to win their loyalty and see repeating purchases you need to go an extra mile. Just discuss this with your team, make a brainstorm and choose the right strategy where both your employees and customers will be happy.

      It’s important for businesses to take into account needs and requirements of customers, otherwise they will look for another shop where their needs and requirements will be takes into account. This is an axiom of today’s business. If you treat a customer well, he will tell two people. If you treat him poorly, he will tell ten people.

    1. Thank you for your comment, Donna. ‘3R rule’ is the rule we have been following in our company for many years. It helps us to deliver top quality customer service

  2. I am currently in the process of building an online retail brand with my partner and found this article really interesting. How would you tailor the effectiveness of great customer service to a startup eCommerce?

    1. Thank you for your comment, Blessing. Great customer service really matters especially for small businesses and startups. Each positive feedback can bring new customers while a single negative feedback can spoil reputation and scare potential customers away. Today consumers can easily share their experience publicly and we should remember that our customers can be the best brand advocates. When you provide great customers service, you not only satisfy your customers and make them happy, you also build your reputation and your brand awareness

  3. This was a fantastic article! I have been involved in Customer Service for 13+ years and as the old saying goes “You learn something new every day”. This was definitely one of those days, so thank you for a well put-together piece of knowledge

    1. Thank you for reading my article, Dominique. I am glad you liked it. You are right, we learn every day. And I’d like to add that we should not stop on what we have achieved.

  4. Great post Olga, we’ve shared it on our social channels! At QuickTapSurvey we find that companies usually have the right intention, but are not quite sure how to begin. We ask them this: how can you know what your customer’s expectations are, unless you ask them?!

  5. A person necessarily assist to make seriously posts I might state. This is the very first time I frequented your web page and so far? I surprised with the analysis you made to create this particular submit incredible. Excellent process!

  6. Am a P.Attendant so would like to recommend you for your excellent ldeas towards Customers Excellence Services because most of the BP Dealers are having problems with customers due to poor customers services hence competetors are winning the customers.

  7. I appreciate your article, customer satisfaction is very important as searching for new prospects and customers. We are in the business of software application development and we know how fast technology is changing and new gadgets coming in the market. We always try to build customer-centric atmosphere and deliver best support and solutions.

  8. Nice article Olga. Though customer satisfaction is an important and detrimental aspect of any service but is there any way, where we can limit the implications of bad performance in services. For example, in manufacturing sector, we limit liquidated damages of a bad product to 5 or 10%, but in services these damages are getting into ripple effect and a small mistake in services may result into big damages. Any thoughts on this aspect.

    1. Thank you for your comment, Vijay. I totally agree with you that a small mistake may lead to major losses if a company is service provider. However, poor customer service will cost more. Especially if companies cannot support their customers in cases of unforeseen circumstances like DDoS attacks, etc.

  9. well its so true about poor customer service.If i can say treat people with respect and then you will get respect back.Also sometimes the customer don,t have people to speak to and maybe they feel more comfortable with you, take some time to listen to there problems and not jump nothing will be solve.

    1. I agree with you Sharon, it is important to listen to your customers and treat them the way you would like to be treated yourself. Thank you for your comment.

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