The true cost of poor customer service

poor customer service
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Poor customer service is costing US companies £25 billion ($41 billion) a year.

The survey revealed that 44% of US consumers are taking their business elsewhere as a result of inadequate service – and of those, 89% have switched at least once or twice in the last year. Furthermore, 53% are so put off from calling a business (for fear of not being able to speak to a real person straight away) that they will switch to a competitor without even attempting to resolve a problem.

Top frustrations causing consumers to switch are:

  • Lack of appreciation from a business (53%)
  • Unhelpful/rude contact centre staff (42%)
  • Being passed around multiple agents (32%)
  • Agents lacking the knowledge required to answer a query (29%)
  • Being kept on hold (25%)

With respondents spending an average of £240 ($392) before leaving, it is estimated that £25 billion ($41 billion) is lost by businesses each year – not including the significant cost of replacing lost customers and the impact of negative word of mouth.

Faced with a poor experience, 58% of customers would never use that company again and half would tell friends and colleagues not to use the business. As further evidence that complaints can’t be kept quiet in the digital age, a third (34%) of consumers admit they would take their revenge online by posting a review or complaining via social media. Among the 25–34-year-olds, this figure soared to nearly 60%.

Jonathan Gale

The research indicated that 16–24-year-olds are the most tolerant when it comes to bad interactions, with 11% taking no action at all following a poor experience. But those that do are the most likely to turn to social media – arguably the most detrimental means of complaint.

“With £25 billion ($41 billion) of revenue being transferred between companies, this research reinforces just how much influence customers have on a business’s success,” said Jonathan Gale, CEO of NewVoiceMedia. “Great customer service is the critical differentiator and investing in providing personalised and engaging customer experiences will help businesses succeed in retaining customers and securing new business.”

Author: Megan Jones

Published On: 8th Jan 2014 - Last modified: 12th Dec 2018
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