Great Place to Work - Certified

The True Cost of Bad Customer Service Runs in Billions



No one can argue against the importance of customer service in today’s business scenario. In case, you own a business, you must be already aware of this. However, what you might not appreciate is the severe impact of substandard customer service on the bottom line of your organization.

Many businesses often do not realize what expensive bad or low-quality customer service could lead them to. If you want your organization to sustain for the longer run, you need to have a serious focus on eradicating low level of customer service.

If you do not provide good service to your customers, your business may suffer.

However, what can be termed as bad service?

There may be different categories of bad customer service such as inexperienced agents handling customer calls, poor or inadequate attention, long queues and automated self-service.

An estimated 75% of customers feel that the time taken to access a live agent is very long, while 78% of the customers are known to come out of a business relationship, because the service was not up to the mark. Furthermore, about 50% of the agents are not able to respond to customer queries satisfactorily, while around 61% customers moved to a rival due to dissatisfaction with the services provided.

Cost of Bad Customer Service

In the United States alone, poor customer service costs up to 84 billion each year due to abandoned purchases, as well as defection. On the other hand, when your business provides good service, the benefits are many such as – convenience, competency, higher responsiveness and greater personalization. In fact, 90% of customers claim that they would not mind paying more money for getting a high level of customer service. About 7 out of 10 customers would like to do transactions with you, in case you resolved their complaints. Good customer service can be ensured by a business, by ensuring that customer experience is personalized, offering multi-channel support, proactively responding to customer issues, and improving recruiting quality with competent agents.

There are some businesses that tend to concentrate more on the expenses they have to incur while rectifying customer related issues. However, it should be remembered that when there are unhappy customers, the cost can be even greater for a business.

There are several cases when even a single misstep can result in an abandoned customer who would otherwise have done a repeat business with the organization in the future.

It is true that while providing good customer service, a company may incur certain costs, but such acts on the part of the business are appreciated by customers. When a company has built up a powerful reputation of providing great customer service, the costs incurred for providing that can be balanced out, since there is hardly anything more important than to keep customers satisfied and loyal.

It is crucial that organizations must consider both the cost and the time to replenish a lost customer. The business rivals are aggressively waiting and prepared to snatch away their competitors’ dissatisfied customers. Moreover, even customers are not averse to switching over their loyalties quite easily and quickly.

What is more disturbing is that there are many organizations that are unable to find or calculate the correlation between losses incurred and customer complaints. In fact, about 55% customers are not willing to formally complain, as they are highly skeptical about the prospect of chatting with automated systems and try to find out a different organization, without even getting a resolution to their problems.

Top 5 Pain Areas of Customers

  • When a company does not show enough appreciation
  • Customer service staff being rude or non cooperative
  • Calls being transferred to several agents/departments
  • Customer service representatives do not have adequate knowledge for handling queries.
  • Calls put on hold

Importance of Social Media

At present, the use of social media is extremely essential for maintaining a strong reputation in the market and to deliver quality customer service. Gone are those days when customers had to get in touch with an organization, write or call privately. This is the era of social networking when social media is used as a powerful tool for customers to express their comments or concerns. Responses can be given immediately, thanks to the rapid growth of social networking sites.

Since everything is more public than ever before to vent out grievances and complaints, organizations have a bigger responsibility for addressing the issues of their consumers, as well as handling concerns of other social connections.

The impact of social media has been tremendous to say the least. It is so powerful today that even a single sub standard customer service can be detrimental for a brand image. Therefore, it is vital for you to understand that when you deal with an issue of poor customer service, the actual potential cost should not be overlooked. 







Interesting Insights

Kindly share Pardot form code (Suggestion for CTA Name - Subscribe Now)