bad customer experience

What is the Full Cost of Bad Customer Experience?

Poor customer service has a measurable impact on a business’s bottom line. In fact, 32% of customers would stop dealing with a brand after one bad customer experience.

If you speak to CEOs and managers, very few of them underestimate the importance of quality customer service. 

Nonetheless, they can find it very challenging to invest properly in this area. 

That this can have severe consequences for enterprises, including the loss of customers and revenue. 

Poor customer service in a call center can lower annual turnover and possibly lead to the closure of a business.

In this article, we’ll look at some of the high costs of poor customer service, how they affect your business, and what to do about it.

What are the (expensive) negative impacts of poor customer experience?

It’s difficult – if not impossible – to calculate the cost of a bad reputation. However, brands that manage above-average customer experience bring in 5.7 times more revenue than those that fail in the sector.

1. Reputation damage

Word of mouth spreads quickly. In the age of social media, a negative evaluation of a service provider can reach hundreds of thousands of people like wildfire.

People are more likely to recall negative experiences than positive ones. They’re also more willing to share negative experiences on social media, and dissuade their family members from engaging with the brand. Source

Customers rely heavily on third-party assessments and reviews when making purchasing decisions; 87% read online evaluations for local businesses.

customer experience

How to react to online reputation damage

When you get a negative comment on your social media page, don’t ignore it! 

A quick response shows your potential customers that you care about what they think and want to ensure they have a good experience with your business. Reply with an apology and explain how you will fix the issue.

In many circumstances, customer feedback provides a level of transparency and honesty that marketing and sales communications cannot offer.

2. Loss of new and long-term clients

When someone is highly unsatisfied with a brand experience, what do they do first? (Apart from submitting a critical social media review, of course!) If they’re like most consumers, they’ll start looking for other possibilities right away.

It is now easier than ever to identify alternatives to a supplier. 

Suppose a consumer is transferred between many customer service agents or placed on hold for minutes at a time. 

In that case, the customer may conclude that taking their business elsewhere will be faster and less unpleasant.

39% of customers would not use a company’s services again when offered poor customer service. Thirty-seven percent would immediately change suppliers, while 28% would find a way to air their complaints through an online review.

Customers change brands because they are “weary of dealing with various representatives” and “tired of waiting.” 

It’s important to look at how your company handles client complaints. 

enhance positive customer experience

How to retain clients

Businesses should seek customer feedback and conduct internal customer service audits. 89% of customers are likely to purchase again from the same brand after a good customer experience.

So, consider sending an email follow-up survey to get customer feedback and score your customer service process. 

Then optimize the process based on the information you’ve gathered.

This final step is where most businesses face the real challenges. It’s one thing to understand the shortfalls with your services, but another thing to actually change them. 

The rise of No-Code development is going some way towards mitigating this problem; businesses that used to rely on extensive development projects to change even minor services can now make those changes themselves in a matter of hours, using simple visual tools. 

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3. Low company morale

When your contact center personnel deal with unhappy consumers regularly, that unhappiness will rub off on them. They’ll start seeking a way out if they realize that management isn’t offering the necessary tools to address customer service issues. 

Employee satisfaction is essential for many reasons, including that happy workers are more productive. You want your employees to have faith in your product and company because it determines how they treat your clients.

More importantly, you want your employees to be proud of the firm for which they work. This can be challenging if you have low customer satisfaction

How could anyone in their right mind be enthusiastic about a business that mistreats its customers?

In the end, customer service is about working with your customers to discover answers and systematically resolve problems through great experiences. If you approach your clients as if they can’t do without your business, your employees will pick up on this and adopt the same negative attitude.

employee satisfaction is required for good customer experience

How to boost employee morale

As your business scales, you should find ways to automate some manual tasks

Additionally, having the right customer service software shows that you care for customers, boosting the agents’ morale.

Your company must also embrace the fact that tech and skills never stand still; training and culture are something you’ll need to keep working on, forever!

4. Poor lead conversion rate

Suppose potential customers have trouble getting their questions addressed by your sales agents. In that case, it’s only reasonable for them to anticipate that once they’ve completed the deal and paid their bill, the customer service will only grow worse.

Because if you’re already mistreating people to acquire their money, what will you do with it once you have it? 

Poor customer service will harm your company’s capacity to convert leads into sales. It’s tempting to think of “customer” service as solely referring to existing customers, but it also includes leads.

promoters for  a good customer experience

How to increase lead conversion

Scheduling friendly email follow-ups can help re-engage your leads, bringing them back to your sales funnel. 68% of customers claim that when a company sends them proactive customer notifications, it improves their view of the brand.

5. A consistent loss in profits

Poor customer service, above all things, will drive your company into a profit-sucking spiral. You’ll have difficulty obtaining new sales after your reputation has been tarnished, especially referral sales. Even your most devoted customers will eventually leave.

As a result, to stay in business, you’ll need to either cut costs or expand the promotion to attract new customers.

Cutting costs means you’ll still need to improve customer service by hiring new employees or training your current employees, both of which will cost money. 

On the other hand, spending money on marketing may bring in new clients initially, but it will simply exacerbate the problem as you grow.

How to maintain and boost your profits

You can retain your customers to boost sales by implementing a loyalty program. You can construct a rewards scheme that appreciates every type of shopper you have, from new customers to VIPs. Customers who participate in high-performing loyalty programs are 80% more likely to choose the same brand over competitors.

Additionally, companies should think about arranging customer gratitude activities. These occasions don’t have to be extravagant or red-carpet-worthy; modest gestures like creating time for face-to-face conversations and hosting a customer appreciation week can suffice.

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