Customer Crazy

We have just read a report [1] that states that 65% of 1,000 consumers surveyed said they’ve cut ties with a brand over a single poor customer service experience. Most of us understand this conceptually but are we the only ones that find this type of statistic scary? For every ten customers, 6.5 will leave if we screw up…… If a company makes ten mistakes in a day, 6.5 customers aren’t coming back.
Now if you are only planning to sell one product, once only to each one of your customers then perhaps you can stop reading now……unless of course the 6.5 disgruntled customers are off each telling eleven others about their bad experience. Indeed this is what further research would tell us – the average dissatisfied customer shares their experience with eleven others.
OK this is getting a little bit serious here and unless you have a monopoly, you probably need to pay attention. If customer service is so important, why are so many companies so poor at it? Clearly nobody believes the reality of how much poor customer service can cost an organization. However, according to the latest NewVoiceMedia study, U.S. brands are losing approximately $41 billion each year due to poor customer service. If you are going to throw away that sort of money feel free to throw it our way.
Let’s look at another statistic – only 14% of respondents in a 2014 CMO survey [2] rated the customer-centricity of their organization as high; and only 11% believe their customers would say the same. So even our own people recognize that we are rubbish!
The general thinking is that by 2020 customer experience will overtake price and product as the key brand differentiator. With this prediction, brands and organizations should be a little scared if they haven’t already planned for improvements in customer service and engagement heading into 2015.
Take a look at your objectives for 2015 and your priorities. Is customer service up there at the top of your list or are you already preparing your excuses – “it costs too much”, “our customers are too demanding”, “our systems don’t work” or even “we have too many other priorities”. Perhaps you are looking outside the window and you figure that you are no worse than the competition.
The reality is that you cannot afford not to make it a priority. Where customers have a choice it is clear that they are ever more likely to exercise that choice and go elsewhere. Elsewhere means reduced revenue. Reduced revenue leads to cost cuts. Cost cuts create an inability to service customers well. Poor service results in the customer making the choice to leave and so it continues.
Whilst ROI for customer service is a developing discipline, research consistently draws a firm link to customer service and the overall performance of an organization. It’s frightening to think just how much customer service and the customer experience are impacting the reputation and bottom lines of brands and organizations. While satisfying customer experiences can have extremely positive results (increasing customer acquisition, retention, brand loyalty and advocacy), just a single poor customer experience can lead to the unexpected demise of even the longest customer relationship. You have been warned.
1. 2014 Parature State of Multichannel Customer Service Survey
2. 2014 CMO Council Mastering Adaptive Customer Engagements Report