Edition 21

How much does bad customer service cost?

24th March 2010 By James Digby no comments

According the results from a recent survey completed by Greenfield Online, bad customer service seems to pose a big problem – over $338.5 billion a year.

The survey was carried out in 16 countries across the globe, with nearly 9000 consumers taking part to find out how important customer service was to retaining someone’s business. The results are quite interesting. The one common element among all countries: poor customer service has a major impact on enterprises worldwide, directly resulting in lost revenue.

What is going wrong?

Contact centers have always measured a wide variety of KPI’s, such as time spent on each call, the speed-of-answer, and customer reported satisfaction rates. However, it is only a handful of companies that look into measuring customer satisfaction & their effectiveness in converting each opportunity into revenue.

Without really understanding what your customer wants, or why they even purchase from you, those factors alone should be grounds for a customer to leave - however, add some bad service into the mix, and you can wave goodbye to that customer forever.

Is my industry within a problem sector?

The hardest hit of all industries are Financial services, Cable & satellite TV providers and Telecommunications. This is not something new, but even “safe” sectors like Utility are now starting to see major customer churn.

However when you look at the actual losses, they start to become staggering. In the past year, Financial services saw over $44 billion in lost revenue. TV providers suffered more than $36 billion, and Telecommunications saw more than $69 billion walk out of the door to a competitor.

With the new euphoria of social media, it is allowing consumers to think carefully about who they choose to do business with, and companies have to soon learn that they will need to fight for the right to do business. It is not good enough anymore to simply lean back and say “They will be back” – it is not the case anymore.

Common threads amongst all countries

Consumers are asking for more information throughout the buying process. Having to ask for help is OK – just as long as there is sufficient and competent staff on hand to actually help. Customers  are also willing to communicate through other forms rather than just voice, however they all require one thing – staff that are able to deal with their question on time, every time.

So what does it take to make a customer satisfied?

All the findings throughout the survey have pointed to 4 common factors that aided satisfaction:

  • Competency
  • Convenience
  • Pro-activity
  • Personalization

An employee’s competency level is one of the highest ranking influences into how satisfied a customer is whilst making contact with your enterprise. This was again, the main indicator of when a consumer recalled satisfactory interaction with a company. Consumers also wanted various different ways of contacting a company – be it through social media or fax, just as long as they felt they were able to contact you directly.

Consumers understand the need to use voice self service within a multi contact operation, however they felt that personalized support should be on hand – even going to the extent of pro-actively reaching out if they were in need. This fact is also true of all levels of contact to an organization.


Consumers now are more willing than ever to jump to a competitor when they feel mistreated, however all they are asking for are the basics. Treat me like an individual who has a problem, and solve it in an efficient manner.

Companies need to assess their existing communication channels to ensure that they are doing all they can in order to ensure excellent customer service time and time again. It is imperative that an enterprise engage consumers on the customer’s terms, or risk losing them.

About TeleFaction

TeleFaction is a voice of the customer company that allows companies to measure and improve customer interaction, through its patented Return on Behavior® concept. Using Return on Behavior helps find true customer satisfaction levels, pin-point churn points and increased sales through measured cross and new sales ability.

Using our Gemba platform, we give companies the ability to measure and report on all touch points, with features such as:

  • Interactive HR training modules with integrated voice coaching, helping you to ensure that your employee engagement levels are where you expect.
  • Active alerts that will automatically raise any potential problems to the relevant channels.
  • An action navigator to help you find problem areas and plan ways of changing what can be done to ensure the problem is solved.
  • Customizable widgets that allow you to view the data in the way that is relevant for you, and your company’s language.

To find out more about what TeleFaction can do go to : TeleFaction.com and contact us.

About the author: James Digby


At TeleFaction, James is responsible for the Marketing efforts throughout the organisation, dealing with Market Analysis, Sales and Marketing collateral, Strategic Communications, PR and Online Marketing content.

TeleFaction – your specialist for integrated, and automated multichannel customer surveying. Whether in-bound calls, face-to-face meetings, email or direct mail – we can measure it all - constantly and organisation wide.

Visit TeleFaction’s website: www.telefaction.com





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