Report reveals the true cost of poor customer service

A new report has revealed the shocking cost of poor customer service - and the demographic most likely to desert you due to bad service.

Poor customer service is costing UK plc about £15.3 billion in lost business per annum, but younger consumers are less likely to put up with poor treatment than older ones.

According to a survey undertaken by Greenfield Online among 514 consumers, 73% had terminated a relationship in the past because of bad experiences, with the average value of lost sales being £248 per year.

But the report entitled ‘The Cost of Poor Customer Service: The Economic Impact of the Customer Experience’ also found that younger customers aged between 27 and 43 were 60% more likely to go elsewhere than older ones if dissatisfied with the level of service they received.

Daniel Hong, lead analyst of customer interaction at researcher Ovum, which jointly commissioned the study with Alcatel-Lucent’s Genesys Telecommunications Laboratories CRM software arm, said: "With the rise of social media and increased consumer awareness, the cost of customer frustration continues to grow. We’re advising enterprise businesses in the UK to develop cohesive strategies that straddle all channels of customer communication."

He added that in the current economic climate, it was becoming increasingly crucial for organisations, particularly in service industries such as finance, to ensure they retained customers by providing "exceptional" customer service.

As to what poor customer service actually meant to respondents, the study found that problems could be broken down into several categories: customers having to repeat information; feeling trapped in automated self service systems and being forced to wait too long to receive a service.

Other bugbears included speaking to company representatives who were unaware of their service history and not being able to switch easily between communications channels. Some 41% of those questioned said they were most unhappy with having to use voice-based self-service systems, while 39% said they felt it critical to integrate such systems more intelligently with human interaction.

A huge 83% also said they would welcome proactive help when they became stuck trying to undertake a web transaction or some other form of self-service activity.