Customer Experience News & Trends

What bad customer service really costs your company

Just one bad customer service incident can drain your company of $54,000. Ouch! Here’s why it’s so bad, according to new customer experience research.

The problem with poor customer service isn’t rooted in a few singular incidents by a rogue employee. The problem with poor customer experiences in B2B or B2C organizations starts with employee silence, says Joseph Grenny and David Maxfield, authors of the VitalSmarts study.


  • A typical employee witnesses 19 poor customer-service incidents a year, but
  • Only 7% of employees say they always have or will speak up when they witness a poor service situation.

The result: Researchers say bad customer service costs the average company $54,511 per employee each year, according to their study of nearly 1,000 people. And three-quarters of B2B business leaders say that poor service negatively affects the relationships they have with companies.

Who speaks up?

“We scratch our heads and wonder why people don’t speak up,” Maxfield said. “And looking deeper, a critic might question, ‘Even if you do speak up, how can you know you’ll be able to satisfy the customer?'”

It’s possible. In fact, two-thirds of the people in the study said they can solve customers’ problems well enough to avoid any loss of business. They’re trained and empowered, but apparently not ready to jump in when a colleague fails to deliver what customers want.

“Clearly this crisis of silence is not so much a lack of ability,” said Maxfield. “It’s more a lack of motivation.”

What employees can do

So improving customer service — or just making sure that no experience goes south — requires more than training people how to deliver on promises. Training should also include some protocol when employees see an incident of poor customer service.

Grenny and Maxfield suggest that employees follow these tips:

  • Assume the best. Avoid calling out a colleague in the midst of an interaction with a customer. Assume the co-worker isn’t aware that he or she is doing something that upsets customers. Then approach the conversation with curiosity.
  • Talk with interest. Describe the problem gently, with phrases such as, “I’m not sure you intended this …” or “I’m not sure you’re aware of this …” Avoid accusatory language such as, “You always do this …” or “You should have …” It’ll only make your colleague defensive.
  • Address the facts. Avoid drawing conclusions on why your colleague acted like he or she did. Share just the facts, so he or she can address them. For example, say, “When the customer disagreed with you, you said …”
  • Get the other side of the story. Now’s the time to help the colleague see where things might have gone wrong. You might ask, “Is that what you intended to say?” or “Is that the tone you wanted to set?” or “What kind of outcome did you expect?”
  • Ask to offer advice. Before dishing out what you think the colleague should do going forward, ask if it’s advice he or she wants. Say, “I’ve dealt with something like this before and had great results thanks to something my manager once taught me. Can I share that advice with you?”

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