Poor customer service does affect profit
Poor customer service does affect profit

Offering a poor service to your customer will cost your company money in lost profits. This is the accepted wisdom that most managers accept, but if it is a universally accepted maxim then why do some brands still offer such terrible customer service?

New research shows that the financial effect of poor service can be quantified and the cost to US businesses alone runs to $41 billion – yes, billions of dollars lost not because of poor products, but because of poor customer service.

Newvoicemedia.com surveyed more than 2,000 Americans and found that 44 percent had abandoned a company because they felt poorly treated. Of those, almost 90 percent had switched once or twice in the last year.

Of course the financial effect is difficult to calculate – the number quoted in this research is an estimate based on how much customers had expected to spend with a brand. Regardless of the exact amount, there is clearly a significant amount of business that can be gained and retained simply by offering a good level of service to customers.

This is particularly true with customers how able to use social media tools to immediately broadcast their unhappiness. Half of the survey participants in this research said they’d warn friends about a company that treated them poorly, with almost 20 percent saying they’d post a bad online review and 16 percent saying they’d use social media.

Although it is hard to calculate exactly how much poor service costs businesses, it is clear that an investment in good service is almost certainly less than the alternative.


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