The Disadvantages of Bad Customer Service

According to the results of a study by Greenfield Online, Datamonitor/Ovum and Genesys quoted in BizReport, businesses lose more than $80 billion each year because of bad customer experiences. An unmanned front desk, ignorance of customers by an employee busy on a cell phone or lack of timely deliveries: all incidents of poor customer service ultimately ensure a customer looks for an alternative firm with which to do business.

Time Loss in Handling Complaints

When a customer walks into a store and cannot find something he is looking for, it is basic etiquette for the sales staff to help him locate it. If staffs don't respond appropriately, it can lead to customer dissatisfaction. With service providers, the equivalent of this is not keeping service appointments, or brushing off the customer's concerns. Such behavior causes customers to feel they are not receiving the customer service they rightfully deserve. Some customers complain about this and managers then have to spend precious time sorting out such issues and training staff on providing customer service.

Loss of Revenue

Although people raise complaints against poor customer service, an equal number of people silently take their business elsewhere. Bad customer service therefore leads to loss of not just one sale, but all the potential sales by an individual. When you multiply this by the number of customers upset with the lack of service, you are looking at a decline in sales which is great enough to affect the incoming revenue of a company. Considering that the purpose of a business is to make profits, this proves to be counterproductive.

Loss of Reputation

A satisfied customer will tell maybe one or two people; a disgruntled one will tell many more. Gone are the days of simple word of mouth -- a single negative comment on a social networking website has the potential to spread like wildfire. The bad reviews you receive from a few customers can put off other people from even approaching your company. This leads business away from you to a competitor who provides better service. It is important to realize that price is not the only thing that matters to customers; people do not mind paying a little extra if they are assured of quality service.

Greater Expenditure

In today's competitive times, your business must make the most of the customers you have. Poor customer service drives away customers like nothing else and you end up expending greater time, money and manpower on attracting new ones. Keeping your old customers happy is advantageous in more ways than one: Customer loyalty translates into repeat sales, good referrals and positive reviews, all of which spell success for your business.

References

• BizReport; Report: $83 billion lost because of bad customer service; Kristina Knight; February 2010
• Customer Service Point; Customer Service: Tips for Curing Bad Customer Service; Jill Homer
• Customer Service Training Center; Customer Service: The Importance of Quality Customer Service; Barbara K. Giamanco