How Does Poor Customer Service Affect a Business?

Customer service or customer care describes interactions between a business and a customer aimed to increase the customer's satisfaction with the products, services and overall mission of the business. Essentially, any communication between a potential, current or past customer and a business, such as conversations in a physical store, over the phone or on email, may be considered a part of customer service. Poor customer service can have several detrimental effects on a business.

Purpose

The purpose of customer service is to enable customers to purchase goods and services as simply as possible by providing any necessary information, processing returns and handling problems. Poor customer service makes it difficult for consumers to obtain the information that they desire, which could potentially reduce revenue. For instance, if a customer interested in having a wedding reception emails three different hotels requesting information and only one responds promptly, the two that did not communicate efficiently may lose the customer.

Effects

Poor customer service can irritate, anger or frustrate customers, which may discourage them from purchasing goods or services from your company in the future. For example, if a customer service representative is rude, the customer may harbor resentment toward your company, even if the product or service sold was of high quality.

Potential

Poor customer service has the potential to lead to a poor brand or company image. For instance, if the wait staff at a new restaurant is inattentive, word of mouth and reviews in newspapers or on the Internet could give the business a reputation for poorly trained waiters. Customers are likely to remember bad customer service experiences, and attracting them back may be difficult.

Size

Customer service is important for companies of any size. However, small companies, such as locally owned mom-and-pop shops, should make a special effort to provide excellent customer service to compete with larger companies, which may offer better selections or cheaper prices, but less personal service.

Considerations

Poor customer service can increase the costs of running an organization, even in the public sector. According to the California Performance Review, telephone calls to various state agencies cost about $100 million a year. There would be a significant cost savings if customer service personnel resolved issues more effectively to reduce the number of repeat callers.

References

• U.S. Department of Labor, Bureau of Labor Statistics: Customer Service Representatives
• U.S. Small Business Adminstration: Market and Price
• California Performance Review: Making High Quality Customer Service a High Priority for All Employees in State Service
• MSN Money: The Customer Service Hall of Shame