The True Cost of Bad Service

Human Resources, Leadership, Training

Losing a customer because they experience bad service at your company costs you more than just the profits that single customer would have created. The true cost of bad customer service goes beyond just one customer and, in fact, beyond your customer base entirely. Consider these unfortunate truths about the consequences of delivering poor customer service:

#1 – The benefit of the doubt is hard to come by. Customers expect more and more from the companies they do business with. When they have a bad experience, they tend to equate that single event to the whole of your business relationship. Regaining a customer’s trust is harder than earning it in the first place.

#2 – Unhappy customers like to talk about why they’re unhappy. They’ll tell their friends. They’ll tell their co-workers. If they follow you on social media, they may tell everyone in your network. If they’re really unhappy, they may tell the world by posting an unfavorable review about their experience. People are more likely to share negative experiences than positive ones, and these days, sharing is easier than ever.

#3 – Customers who don’t feel valued will look for value themselves. This often means they’ll become more sensitive to price or they’ll raise their expectations even higher than they were before the bad customer service experience.

#4 – If a single customer’s bad experience goes viral, it can affect employee recruitment, morale, and retention. For employers, this can be the start of a vicious cycle. If bad service damages brand, you’ll have a hard time attracting the very type of employees who can help you regain your reputation.

How Do You Solve a Crisis of Bad Customer Service?

In the short-term, addressing issues of poor service requires quick action when a customer has an issue. Train your staff on the LEAST method of problem-solving to immediately deal with a customer service issue. Empower employees to find solutions to customer challenges, and allow escalation of issues that may result in a lost customer.

In the long-term, delivering customer service must become part of your company culture. Creating customer loyalty through good service can’t just be one thing you expect of your staff, it must be engrained in everything you expect of your staff. Hire based on customer-centric values, even for positions that aren’t customer facing. Recognize employees who receive accolades from customers. Define customer service expectations clearly, train on them regularly, and follow up through coaching and mentoring.

Improving customer service is both a marathon and a sprint. When you create a culture based on service and react quickly to customer concerns, you’ll be able to spend more time building customer relationships than repairing them.

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