What is the cost of poor customer service?

Do you know what bad customer service is costing your business? This is the question HelpScout’s Gregory Ciotti raised in a recent blog – an interesting article that puts into perspective the cost of poor customer service.

Did you know…

  • 86% of consumers quit doing business with a company because of a bad customer experience?
  • 51% said they would only try to reach support once before giving up on a purchase?
  • A typical business hears from only 4% of dissatisfied customers?
  • On average consumers tell 9 people about good experiences… and 16 people (nearly twice as many!) about bad experiences?


While many companies are keenly aware of the value of excellent customer service, few can accurately quantify its direct impact on their bottom line. Inversely, poor customer service has a clear and immediate impact on a company, directly resulting in lost revenue.

Furthermore, Ciotti explains, when customer service goes bad, the ensuing buzz creates a ripple effect – did you know people are twice as likely to talk about bad customer service as good customer service?

Today’s customers frequently share negative stories of customer service widely, a recent Hubspot survey found. Meanwhile a 2013 marketing survey by Marketing Charts asked its respondents how frequently they had told their bad customer service experiences. More than half, 54%, indicated that they had shared their bad customer service experience more than once, and 52% stopped making purchases after a bad experience.

Ciott’s findings make clear that there is a high correlation between customer service and customer loyalty as well as revenue, and that understanding customer frustration and knowing their tipping points is crucial to avoiding problems further down the line.

There are steps companies can take to make improvements:

  • Consumers will welcome companies who are more proactive – responses can go a long a way in restoring faith in a consumer’s mind.
  • Identify the gaps between the customer experience and the customer’s expectation.
  • Make interactions more convenient across multiple channels.

In order to provide a superior customer experience, it is imperative that businesses engage consumers on the customer’s terms or risk losing them.  In real terms, Elie Ayrouth writes in Business 2 Community that the cost of attracting a new customer is 6 to 7 times greater than the cost of keeping an existing one.

Effective businesses build their service around the element that matters most: Listening to their customers and their specific needs and delivering service that exceeds the expectation.


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