The Cost of Bad Customer Service

4 min read

Unfortunately in business (and life in general, really) you can’t always make everyone happy. Don’t be fooled though—the impact of customer dissatisfaction isn’t to be taken lightly. The wrath of an unhappy customer goes a long way. It can take a powerful toll on your business’ revenue, referrals and cost.

But what does that really mean for your business?

Let us break down the true cost of bad customer service for you.

Unhappy Customers Influence People’s Purchasing Decisions

It goes without saying that social media has empowered customers to share the truth about their experiences with certain businesses. These days, instead of contacting customer service directly, people often spread the word to the internet masses.

For every unhappy customer who expresses their dissatisfaction to your team, 26 customers will keep silent (and most likely never buy from you again). Others will only share their negative experiences with their immediate circle of friends and family. And thanks to the internet there’s a strong chance customer complaints will come in the form of angry tweets, facebook rants and bad reviews.

The reality is, people are more likely to be vocal about their experience when it’s negative. A customer happiness infographic  by Vision Critical shared that customers are 3 times more likely to tell others about a negative experience. To top that off, 80% of people won’t buy from a business that has negative reviews. And it could take up to 12 positive reviews to offset just one review from a dissatisfied customer.

Master your Technique of Saying Sorry

Bad Customer Service Literally Costs You

Have you ever been out to eat and in order to offset a bad meal the manager removed it from your bill? Maybe brought out a free dessert in hopes of making amends? You may have appreciated the gesture and left satisfied. That doesn’t change the fact, that the mistake cost the restaurant money. Whether or not your customer service team handles disputes by offering customer discounts, refunds or freebies, not handling a situation properly can also affect future profits.

An unhappy customer has a decent amount of power over your brand’s reputation. Like we mentioned, people are actively searching for unfiltered reviews and discussions before making their purchasing decisions. Filter in that fact that 88% of those people have been influenced by what they’ve found suddenly that single negative encounter is greatly affecting whether or not you continue to gain new customers.  Once your reputation takes a hit it’s almost a dominos effect on sales.

Not only will referrals be affected but, as we know, internet word spreads fast. Soon loyal customers may start to leave. A great example of this has been demonstrated by United Airlines. You might recall the recent bad customer service of United Airlines and how that’s affected them  (hint: customers and employees are not happy). It’s a lot more expensive to get a new customer than to keep a current one (like 7 times more).

Differ between Customer Satisfaction and Customer Loyalty

These situations can shine a light on your customer service team. Maybe your team pulled out every trick in the book to try to turn things around for the customer. If not, it might be time to take a good, hard look at how customer service handles unhappy customers.

Not only will a re-evaluation take some serious time, but any new training involved will too. Of course this isn’t to say you shouldn’t be looking to improve your business’ customer service. Only that giving it a rehaul hopefully won’t have to involve too many unhappy customers.

Prevent Dissatisfaction Before It Happens And Deal With It When It Does

Alright, now you’re probably wondering what you can do to prevent your business from becoming another bad statistic. The good news is it’s possible with a bit of extra effort from you and your team.

First things first, when mistakes happen, be proactive. We all make mistakes and most people understand that. However, the sooner you react the better, especially when it comes to bad customer service. If you made a mistake, make sure you take responsibility. An apology is in order and if your team does offer additional discounts or ‘sorry presents’ now is the time to use them. Speaking from experience, there’s not much more a business can do to turn someone away than to argue a reasonable dispute or refuse to at least listen.

On that note, listen up. Your product can be the very best, but if you’re not listening to your customers’ needs, you can kiss business goodbye. Not doing so can lead to frustrated customers and lost business. Nowadays it’s very easy for potential customers to seek out other options with the competition. Give your people what they actually need, not what you think they need.

Treat your customers with respect and train your customer service team to do the same. Never leave negative feedback or complaints go unresolved and truly take the time to take into account all their needs. Especially if their problem will require more than a quick fix solution.

The Bottom Line

Thankfully one dissatisfied customer doesn’t mean the bane of your business’ existence. But let those complaints rack up or go unresolved and that might just be the case. Multi-million dollar corporations might still be able to keep new customers rolling in even after a slew of customer disputes. However, smaller businesses who rely on repeat sales and positive feedback depend on keeping people happy. (Besides do you really want to be that guy known for bad customer service?)

So, go the extra mile for your customer. Steer miles away from bad customer service. And most importantly, make them remember why they came to do business with you in the first place.

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