The Long-Term Effects of Bad Customer Service for a Business
By Small Screen Producer. Publish on March 27, 2014.
Do you remember the last time you experienced poor customer service? How unappreciated, put off, fed up, annoyed, and tired you felt about a business? It turns out that poor customer service experiences can do more than turn off just a few customers. It actually creates a chain of events that profoundly impacts almost every aspect of a business or organization. What does it cost in dollars? U.S. businesses lose $83 billion dollars each year due to defections and abandoned purchases as a direct result of a poor customer experience (Salesforce).
After a customer has negative experience with a business:
- 58% will never use the company again
- 49% will tell friends not to use the business
- 34% would take revenge by posting a review online or sharing a poor experience on social media
(New Voice Media, Jan 2014)
The value of awesome customer service isn’t obvious or takes into effect right away, but it does prove to have long-term benefits for a business. On the other hand, poor customer service profoundly impacts your business in the following ways:
Poor Customer Loyalty
First impressions do wonders to how long a customer stays with a company. A majority of customers say that they would have stayed if the company had acted to prevent them from switching to another business, if the issue was resolved during the first contact with the business, and if they were rewarded for doing business with the company (visual.ly)
High Employee Turnover
Along with loss of customer loyalty, what a business might not realize is that you lose company morale in the process. Employees can get burnt out and their loyalty to the company depletes if they’re handling too much negativity, and too many complaints. Worse, this can lessen a employee’s positive attitude towards customers, which can create a never ending cycle of poor customer service.
Upset customers have the opportunities to share experiences more easily through channels such as social media and online review sites. These sites have high authority and rank well on search engines. So when a user Google’s you, your reviews often get seen first. A business’s reputation that’s taken several years could take even longer to repair and rebuild due to poor customer reviews.
When a customer has a poor experience with a business, they’re not only not coming back, they’re probably going to tell their friends about it. Customers are more likely to share bad experiences than good ones. And social media helps customers share their experiences with others.
Loss of Profits
Of course, when you lose current and potential customers, your profit and revenue go with them. 66% of consumers are willing to spend more with a company they believe provides excellent customer service. And it costs 5 times more to acquire new customers as it does to keep those you have (visual.ly).
So what can businesses do to improve their customer service?
- Hire a competent team. When asked what the top reasons were for giving up on a brand, 73% or customers reported that rude and incompetent staff as the primary issue (HelpScout)
- Provide multichannel support and quick ways customers can communicate to you through email, social media, website form, and phone. The more opportunities you provide, the more support the customer will feel.
- Get proactive about responding actively managing and monitoring the mentions and reviews you receive so you can appropriately respond. You might need to the help of a reputation management dashboard for this. 40% of customers say improved interaction with service employees is the key driver to spending more money with the company (HelpScout).
- Personalize the customer experience. What can a customer experience with your company that cannot be replicated by a competitor? Great customer service stems from personalization. Knowing what makes the customer tick creates more opportunities for them to purchase from you and allows you to keep a long-term customer.
About Small Screen Producer
Small Screen Producer is a full service, marketing firm located in Houston, Texas that specializes in online digital media marketing through a 4-step process. Step 1: WE PLAN a custom web presence strategy for your business through website design and development, mobile development, social media account creation and branding. STEP 2: We then POSITION your brand through Pay-Per-Click advertising and search engine optimize tactics that include on-page and off-page SEO that are Google and Bing approved. STEP 3: We then PROMOTE your brand using an Inbound marketing strategy or a content marketing strategy to help you accomplish your marketing goals. We do this through blogging, video production, infographics, call-to-actions, landing pages, and free educational offers. We help you build trust and rapport with your customer base. STEP 4: We then PROTECT your brand's web presence with a reputation management program that monitors social media and on line reviews. Get started today with a free online marketing assessment of your company's web presence. Your company deserves it.
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