Customer Experience News & Trends

What does bad customer service do to a good business?

The road to customer loyalty is paved with good intentions. Then stupidity gets in the way.

Stupidity often comes in the form of rules, policies and processes that focus on the company, not the customer. They pave the way for poor experiences.

That leaves customers dissatisfied — and that’s where the trouble really starts.

The troubles with poor service

When customers experience inconsistent, or flat-out bad, service, here are some of the things that go wrong:

  • They become more price sensitive. They’re less likely to stick around if prices go up, even marginally. In a TARP Worldwide study, just 10% of customers who didn’t experience service issues were bothered by increased product prices or service fees. Meanwhile, almost half of customers who ran into service problems two or more times were unhappy about price hikes — and were less likely to stick around when they occurred.
  • They let it fester, and are more easily swayed to switch companies. Only half of customers who have a poor service experience tell the company. The other half don’t say anything. Instead, many of them let the ill feelings fester and will be more easily enticed to try other companies without ever letting you know why they’re leaving, according to John Goodman, author of Strategic Customer Service.
  • They tell other people about bad experiences. More than 60% of people say they tell others about bad customer service experiences. Meanwhile, only 45% of people share their good experiences, an American Express study found. Even worse, the people spreading the bad word tell about 21 family members, friends or colleagues. Good news, on the other hand, only makes it to eight people.
  • They just leave. More than 80% of customers stop doing business with companies because of bad service experiences. Most often, they feel like the people who are supposed to be helping them don’t actually care about them, found Oracle’s “Customer Experience Impact Report.”

Creating a positive impact

On the brighter side, providing good, hassle-free customer experiences does pay off. When customers get consistent service and become loyal, they impact everything from employee morale to the bottom line.

Loyal customers are easiest to work with and cheapest to retain. You don’t have to entice them with special deals, new promotions or even advertising.

In addition:

  • They’re willing to spend almost 15% more to get great service, an American Express study found.
  • More than 85% will pay more to ensure a great experience, an Oracle study found.
  • Beyond that, nearly 80% will recommend products and services after they’ve had a great experience.

“There are many who subscribe to the convention that service is a business cost, but our data demonstrates that superior service is an investment that can help drive business growth,” said Jim Bush, American Express executive VP of world service, when AmEx’s study was first released. “Investing in quality talent, and ensuring they have the skills, training and tools that enable them to empathize and actively listen to customers are central to providing consistently excellent service experiences.”

How one company got focused to improve experiences

To improve customer service and keep customers loyal, get super-focused on a few key elements.

It worked for Expedia, Inc.. As Chris Bright, director of interactive applications at Expedia, explained, the company focused on excelling in three areas, figuring if they could get those right, customers would have consistently great experiences.

Expedia centered training, everyday operations and business decisions on:

  • Simplifying. It aimed to make every process, contact and conversation as easy as possible for customers. They worked to eliminate customers’ extra efforts, making service, as personnel, visible and accessible as possible.
  • Personalizing. Front-line employees were encouraged to take all the time they needed to make each customer feel special — whether it was through extra time spent listening, showing empathy or personally taking responsibility.
  • Honoring. Management backed up front-line employees on decisions they made to do the right thing for customers in all circumstances. They all focused on honoring customers’ needs, time and loyalty.

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