Revealed: The true cost of poor customer serviceby
It’s official: having a great product is simply not enough to guarantee you contented, cash-happy customers. Following a recent study, NewVoiceMedia has revealed the extent to which customer service plays a part in consumer spending activity. And the findings demonstrate that companies who neglect their after-sales care will have far more than just disgruntled punters on their hands.
A home-hitting $41 billion a year is thought to be lost by US companies who leave a lot (or even just a little) to be desired when it comes to customer service, with 58% of clientele never returning to the company who let them down. And that’s just the tangible, statistic-friendly repercussions; who knows the extent of the financial blow imparted by bad word of mouth, which, in the 21st Century, of course covers the cyber sphere too. While half of disappointed punters wouldn’t think twice about telling everyone within earshot about a company’s shortfalls in service, 34% (rising to 59.3% in when it comes to 25-34 year-olds) actively use social networks to spread the unfavourable word. Think wildfire.
On top of that, companies should take into account the time and cost involved in replenishing their lost custom. Competitors are always ready and waiting to pick up the pieces of their rivals’ broken customer relationships and, according to this research, consumers are ready to shift allegiance at the drop of a hat – or telephone receiver as the case may be.
What’s even more disconcerting is that companies may not even be able to monitor the correlation between complaints and loss of business. Up to 53% of consumers are so reluctant to lodge a complaint for fear of having to communicate with droning automated systems that they’ll look elsewhere in future without even attempting to get the issue resolved.
It’s clear that telephone is, then, still consumers’ most favoured communication method; 59% prefer to pick up the receiver to make enquiries or report complaints. While this traditional process easily holds the statistical majority, more modern tactics may well come into their own in the coming years. At present, 33% of consumers turn to email to voice an issue, and 27% of the younger group of clients take to social media to raise their concern, as they consider it the most effective way to induce a response.
The top five frustrations of customers were found to be:
- Lack of appreciation by company - 53%
- Unhelpful or rude customer service staff - 42%
- Being passed around multiple agents - 32%
- Staff’s lack of the knowledge required to answer a query - 29%
- Being kept on hold - 25%
On the flip side, however, companies that get their customer service right will reap the rewards; the survey suggested that a positive experience will significantly influence the loyalty of 70% of consumers, while 69% would endorse the company by recommending it to friends following good service. Half of consumers would become regular spenders, and 42% would be happy to spend more with the company in question.
Jonathan Gale, CEO of NewVoiceMedia summarised the study’s findings: “Great customer service is the critical differentiator and investing in providing personalized and engaging customer experiences will help businesses succeed in retaining customers and securing new business.”