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The True Cost of Poor Customer Service

Upsetting customers can be more costly than losing one sale. Here’s how to make sure you’re not damaging your reputation permanently.

No company wants to give poor customer experience. However, many companies may not understand the true cost of bad customer service. You will find it’s ultimately much cheaper to invest in quality service than neglecting it. Providing excellent customer experience isn’t a nice bonus or an “add-on” feature, it should be a core tenant of just about every company’s mission statement. Below are just some of the many ways providing a bad experience is hurting your business.

Losing Customers

Obviously, you never want to lose customers. However, things happen, you can’t possibly keep everyone happy. That being said, never write off those customers you lost due to poor customer service, they could be damaging your profit margin much more than you know. Even when a problem does occur, providing poor customer experience only hurts your chances of getting a second chance to woo your customer.

Poor customer service damages both customer retention and new customer acquisition. An American Express study showed that half of Americans have scrapped a planned purchase simply because they felt the companies customer service wasn’t up to par. I don’t think losing existing customers, and alienating potential new ones needs any more explanation, do you?

Low Company Morale

Happy workers are good workers. You want your employees to believe in your product, your company, and your business. This is what dictates the outcomes of great customer service. More than that, ideally you want your employees to take pride in the company they work for. Generating poor customer satisfaction can make this very difficult.

Customer service deals directly with the consumer/customer. To treat them poorly, ultimately, is to treat people poorly. How could anyone in their right mind be excited about a company that treats their customer base poorly?

Providing poor customer support begins a revolving door of negativity. Contact center employees constantly forced to deal with angry customers will, in turn, make them angry. When they see that management isn’t providing the proper tools to alleviate this problem in customer care, they’ll start looking for the door. No one wants to care about a company more than their boss. Harboring a toxic work environment only increases turnover. With a high turnover rate, expect higher costs in recruiting, hiring and training. That's one of the many customer service costs wether if you are a small business or not.

Bottom line, customer service is about finding solutions with your customers and routing out systematic problems through positive experiences. Never treat your companies like the opposition, your employees will notice and carry on that negative attitude as well.

The success customer service department depends on the quality of the work of your customer service agents.

Damaged Reputation

Word of mouth travels fast. In the age of social media, a bad review or instance of customer service can be blasted all over the internet in moments, and read by hundreds of thousands of people, instantly.

You simply can’t afford to be known for bad customer experience, the days of keeping a lid on things are long gone.

Increased Sentivity to Price

According to TARP Worldwide, customers that don't experience good customer service are far more sensitive to price changes, service changes, additional fees, and overall price.

In any market, there are highly disloyal customers, who are ultimately looking for the best price in the industry. Having a bad service is enough to turn these customers away to your competitors.

Laura Freedman, President of the E-tailing Group, once said "Always keep in mind the old retail adage: Customers remember the service a lot longer than they remember the price." Obviously you can see how this stretches beyond retail.

Providing poor customer service can send all of these potential customers right into the waiting arms of your competition.

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