effects of bad customer service

The Disastrous Effects of Bad Customer Service

According to a 2011 American Express survey, 78% of customers ended a business relationship because of poor customer service. Additionally, in the United States, $84 billion in revenue is lost annually due to poor encounters with sales associates, with 61% of consumers switching to competitors. So how do we define good customer service, and how does it impact and enterprises’ ability to stay solvent? Consumers might define good customer service as convenient and personalised assistance from competent representatives who respond promptly to their individual needs. Once a sales representative realises the importance of good customer service, your business will stay in the black.

The Purpose of Customer Service

Simply put, the purpose of customer service is to satisfy patrons to the degree that they become loyal and want to continue doing business with your company. You can have a great product, but a great product does not guarantee that customers will come back. But combine a great product with superior service and you have won the heart of a consumer who will not only remain loyal but also recommend your product or service to others.

Good Customer Service vs. Bad Customer Service

Good customer service is all about creating an experience that leaves your customer feeling valued. A good customer service professional must be able to discern each customer’s desire and expectation. Some customers require personal attention, whereas others prefer to shop alone—requiring assistance only when asked. An astute salesperson will know instinctively how to approach each customer and govern themselves accordingly.

Second top service challenge: Customers expending moderate to high effort to resolve an issue (46%)

Good customer service involves establishing a rapport with a client that communicates a willingness to serve. Conversely, a salesperson who demonstrates poor customer service can either be overly attentive or not attentive enough. Pushy salespeople can turn customers off, especially if customers feel as though they are being railroaded into buying something they might not want. Similarly, reps who fail to acknowledge a shopper or attend to their wants are just as likely to give consumers a negative buying experience.

Impact of Good Customer Service

The impact of good customer service can be measured in sales. A positive shopping experience produces repeat customers; and repeat customers equals increased revenue. Customer service reps who are friendly, attentive, knowledgeable, but not pushy create an environment that makes consumers want to spend more money. Sales reps must realise that in the eyes of a customer, they are the company personified. People judge an enterprise based on their first point of contact—the sales rep. A warm smile, a friendly handshake, and an understanding heart conveys openness, warmth and a willingness to serve.

Impact of Poor Customer Service

Consumers who experience bad customer service seldom return and those who perceive wait times as too long will likely go elsewhere. A Customer Experience Impact Report published in 2011 by Harris Interactive stated that 9 out of 10 U.S. consumers would pay a higher price for good customer service. However, 50% of consumers felt that sales representatives failed to answer questions adequately. The second most-cited customer service challenge cited by professionals is customers expending moderate to high effort to resolve an issue (46%). Close behind it was customers failing to find answers on their own (40%). In other words, self-service wasn’t even an option. Given these facts, employers can readily see poor customer service can cost a business revenue and its reputation.

What Makes Poor Customer Service

Poor customer service is either a result of poor management or a lack of concern for an employer’s business. When management fails to train staff on the importance of good customer service and retention, the entire enterprise fails. All employees—from the least to the greatest—must understand that every person is a customer and every customer deserves consideration. Employers whose primary concern is the bottom dollar will also fail to place enough emphasis on making customers happy.

Examples of Poor Customer Service

Many customers would agree that auto-attendants, or telephone menu trees, fail miserably when it comes to customer service. While an auto-attendant might work fine for screening and directing calls, the pity is that menu trees don’t always give customers a clear route to someone who can help. It is frustrating for customers who are experiencing difficulty to be automatically rerouted back to the same option with no opportunity to speak to a human being.

Third top service challenge: Customers failing to find answers on their own

Almost everyone has had a negative experience at a restaurant. For example, imagine Jane and Don Miller are celebrating their 20th anniversary at a swank restaurant. However, their waitress seems to be preoccupied waiting on other customers. Don finally motions to the waitress, and she comes to take their order. After thirty minutes, entrees finally arrive, cold. By now, the excitement of celebrating has waned, and what could have been a memorable evening has turned into a nightmare. The waitress presents the check but is disappointed the Millers left only a small tip.

It may happen more often in certain areas, but the ruth is that the potential for bad customer service is not limited to any specific industry. Any business that interacts with clients—whether it be in a B2B or B2C environment, whether it be in-person or across various communication media—runs the risk of alienating customers. Bad customer service can come in many different forms. Here are 15 general signs/actions that represent bad customer service:

  1. Failing to properly greet customers upon first contact.
  2. Forcing customers to wait for long periods of time without apology or explanation.
  3. Forgetting to use courteous speech when speaking with customers.
  4. Transferring customers to other service representatives without helping to answer their concerns.
  5. Not giving full attention to customers.
  6. Demonstrating an incomplete knowledge of the product or service.
  7. Criticising the company, competitors, or other customers.
  8. Avoiding eye contact.
  9. Making excuses.
  10. Fidgeting or showing signs of impatience.
  11. Lying to customers.
  12. Communicating in ways that can be easily misunderstood.
  13. Talking down to customers.
  14. Socialising with fellow employees instead of assisting customers.
  15. Failing to properly thank customers for their business.

Of course, these examples only scratch the surface of bad customer service. In reality, any action—no matter how innocuous—that shows disregard or disrespect for the customer, their time, or their concerns will likely have a negative impact on how that customer views your organisation.

Unfortunately, there are are some businesses that have turned bad customer service into a defining feature. For the past several years, Comcast’s customer service has been rated among the worst available, topping the list for the past two years running, with 54.4% of respondents in a survey commissioned by 24/7 Wall Street. That’s almost 10 percentage points higher than the next highest company! This is largely attributed to the fact that, in many areas, Comcast has no competitors and has grown complacent. All it takes, though, is for a competitor to arrive and treat their customers a little better, and they will leave by the hundreds.

Correcting and Preventing Negative Customer Experiences

The best way to prevent negative buyer experiences is to establish employee training programs to familiarise them with the proper way to interact with and retain repeat customers.

The golden rule used to be, “The customer is always right.” When a client is offended, the best recourse is an immediate sincere apology and an offer to make amends. Of course, lower level sales reps need approval before offering compensation; but a discount, replacement product, or a rain check for out of stock items usually satisfies the customer.

Employees who are rude, indifferent or otherwise offensive to customers should be reprimanded. Depending on the degree of offence, corrective action might include a strict warning, being moved to another department, demotion, a pay cut, or ultimately dismissal.

Of utmost importance is a well trained sales rep who understands that every face-to-face encounter is an opportunity to influence a potential customer. A smile and a handshake can mean the difference between a sale lost or gained and a job retained.

Recognising the Importance of Happy Customers

Employers who stress the need to make customers happy will succeed in building a loyal customer base that results in increased sales, greater productivity and enduring success. More important than the product is creating an enjoyable shopping experience. A notable customer service experience will stick in the customer’s mind for a long time, whether it was positive or negative. Bad customer service will drive them away, and they will tell the people with whom they associate as well. Conversely, customers will also remember a positive customer service experience, which will keep them coming back. Not only that, their friends and family will hear about how they were treated, and if you continue to get positive word-of-mouth reviews, your client base will continue to grow for years to come.

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