The Cost of Poor Customer Service, and How to Fix it

The Cost of Poor Customer Service, and How to Fix It

How would you rate your customer service? The majority of business owners, 80%, in fact, believe their businesses offers superior customer service. And yet, only 8% of customers believe they receive excellent service. The study shows a fairly large disconnect between businesses and consumers, and it can be a costly one.

Download our free retail customer loyalty success guide to learn how to drive customers back 2x more.

The cost of poor customer service

Just how much are businesses losing to poor customer service? Researchers have put a price on it. An estimated $41 million is lost by U.S. companies each year following a bad customer experience – and that’s just in lost revenue. It doesn’t take into account the damage done to your brand when a customer gives you a bad review online or trash talks your business to a friend.

Once a customer has a bad experience, many decide to switch brands. Research shows 44% of U.S. consumers take their business elsewhere as a result of inadequate service. So, the question becomes, what sets customers off? What kind of behavior makes a customer switch? Here’s a list of the top five behaviors that send a customer packing:

  1. Feeling unappreciated
  2. Bothered by rude of unhelpful staff
  3. Tired of speaking with multiple agents/employees
  4. Annoyed by a lack of knowledge
  5. Tired of being kept on hold

Now that you know which customer service behaviors are most troublesome, you can work to correct them. Drawing from the list above, here are several tips to ensure quality customer service:

Make customers feel loved

The research shows customers feel unappreciated, so it’s time to share some love. Your customers keep your business going. Sometimes, business owners forget that. Don’t take your customers for granted. Instead, make them feel appreciated.

Implementing a loyalty program is a great way to reward customers. From new customers to your VIPs, you can create a rewards structure that values every type of shopper that you have. But ensure you implement a “smart” loyalty program – Check out the post, How and Why Loyalty Marketing Really Works to learn the difference.

In addition, businesses should consider hosting customer appreciation events. These events don’t have to be costly, red-carpet-worthy occasions, simple gestures work too. Here’s a list of 18 customer appreciation ideas that you can implement.

Make wise hiring and training decisions

As the research suggests, customers are bothered when they deal with “rude or unhelpful staff” and when they deal with staff that has a “lack of knowledge.” Both of these problems can be cured by making better hiring and training decisions.

When hiring a new employee, make sure he or she is a good fit. Don’t let a rush to fill a position result in a hasty hiring decision that could cost you customers.

In addition, businesses should focus on training staff. Employees should be able to answer questions about the business with ease, and understand the protocol to deal with a problem.

Training should also include how to interact with customers. Your customers want a personalized experience. Encourage employees to get to know the regulars, use first names whenever possible and tailor experiences to a customer’s needs. One of the goals of quality service is to make a connection with customers’ that goes beyond exchanging money at the checkout.

Review your customer support process

Customers switch brands because they’re “tired of dealing with multiple agents” and are “tired of being on hold.” Both of these complaints deal with customer support.

It’s time to review how your business handles a customer’s problem. What’s the process like? Is this an automated phone process? Are customers bounced from employee to employee? On average, how long does it take to a fix a problem? Is there a follow-up procedure to ensure the problem is resolved?

In addition to conducting an in-house audit of the process, businesses should also collect feedback from customers. Consider sending a follow-up survey through email that rates the process and collects input from real customers. Use that input to make real changes that improve the process.

Wrap up

Focusing on the customer experience will not only improve relationships, but it also has the potential to increase revenue. Seven in ten Americans are willing to spend an average of 13 percent more with companies they believe provide excellent customer service.

So, how will your business improve its customer service this year? Share your plans in the comment section below.

Download our free retail customer loyalty success guide to learn how to drive customers back 2x more.

Lisa Furgison
About the Author
Lisa Furgison

Lisa is a writer at FiveStars, a freelance journalist, and co-owner of a media company, McEwen's Media.

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