The cost of poor customer service

Genesys Lab in conjunction with Datamonitor/Ovum calculated a 338.5 billion dollar lost resulting from poor customer service. The survey done by Greenfield Online questioned 8800 people from every age and income group with a 28 online questionnaire based on the services provided by  internet and call centers. Sixteen different countries including the United States, United Kingdom, China, Brazil, Russia, Germany, France, Italy, and Canada were polled and results were reported in “The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement.”

This was the first large-scale attempt to place an economic value on poor service since few companies ever measure their losses which includes time spent on each phone call as well as  the speed of answering. Revenue losses were evaluated by the amount of customers who “defected and abandoned their purchases” and those services taken to a competitor. The poll showed 63% went to a competitor and 37% did not buy the product or service.

The hardest hit companies affected by revenue loss were cable and satellite providers, telecommunications, and government offices. The most positive companies were involved with consumer products, travel, hospitality, and financial services.

The most common complaint focused on automated self-service not being integrated with human assistance. Also waiting too long on-line or on the telephone for service, untrained representatives, and repetitive conversations ranked high on the annoyance scale. The best customer service experiences reported were based on employee competence, consumer convenience, human services integrated with self-service, being proactive, and personalization.

It’s not surprising how customer frustrations actually figure into such profound losses. No matter how much automated self-service is instituted and the human factor eliminated, the savings realized by cutting back on employees may be costing the company far more with the loss of customers. Just borderline or mediocre customer service can no longer retain customers; exceptional service is what consumers demand.

photo credit: guspim

2 Responses to “The cost of poor customer service”

  1. banquet manager said:

    Feb 17, 10 at 4:04 pm

    Customer service is a lost art. With all the restaurant/hotel mergers, service comes in 2nd next to the bottom line being first. I believe provide great service first, even if it costs more money now, then reap the financial rewards later with repeat business.

    Just came across this blog, great stuff.
    So You Want To Be a Banquet Manager

  2. Adam Lawrence said:

    Feb 19, 10 at 12:07 pm

    Interesting. Is this figure for the US or the World?