Why Companies Can't Afford Bad Customer Service

John Scott
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If you do not handle customer service complaints properly, you run the risk of losing loyal customers and attracting negative attention to your company. There is no way to completely eliminate complaints about customer service, but there are ways to put dissatisfied customers at ease and minimize the damage. Your customer service strategy should include a clear plan of action for responding to customer service complaints and preventing upset customers from taking their business elsewhere.

Bad customer service will cost your business money in several ways. The results of the 2011 American Express Survey indicate that 78 percent of consumers have abandoned their transactions due to poor customer service. Abandoned transactions translate directly to lost sales, so this can cost your company anywhere from a few hundred to several thousand dollars. If a customer decides to make a purchase elsewhere, it will also cost you money to replace the lost customer with a new one. It costs anywhere from six to seven times more money to acquire a new customer than it costs to keep a current customer.

Negative publicity is another consequence of failing to handle customer service complaints properly. Five9, a call center software provider, recently released a report about the effects of bad customer service. The report indicates 85 percent of unhappy consumers will retaliate against a business if someone does not meet their customer service needs. Customers in the 18–34 age group are likely to vent about their experiences on social media. Your customer service strategy should include a list of things representatives must do when dealing with unhappy customers. Treating people with respect, being patient with customers, and demonstrating strong product knowledge are all good ways to put customers at ease and defuse the situation. 

Unhappy customers are likely to tell their friends about bad experiences, making it harder for you to attract new customers to your business. Handling customer service complaints properly can prompt customers to tell their friends good things about your company, so you must train your customer service representatives to resolve complaints quickly. Maintain a log of customer service complaints so employees can practice handling different types of problems. Create a training handbook that addresses some of the most common complaints you receive. Training employees properly will give them the confidence they need to satisfy customers and prevent people from telling their friends about bad experiences.

Bad customer service costs you money, customers, and good publicity, so it is something your company cannot afford. If you treat every complaint as an opportunity to satisfy a customer, your customers will be more likely to continue doing business with you. Make sure your employees know how to handle customer service complaints, or you will find it difficult to put a stop to bad customer service in your company.


(Photo courtesy of freedigitalphotos.net)


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