What Is Bad Customer Service Costing Your Business?

By Lauren Fenthum

Understanding why customer service is important is the first step in delivering exceptional service for your business. Providing memorable client service and support is important for your brand’s reputation, without good customer service, organisations run the risk of losing clients and revenue. For many companies, customer service plays a small and insignificant role with regards to the actual running of the business. But the truth is, customer service plays a much bigger role in the operational and, ultimate success for the organisation.

Compare your business to that of a pyramid. If there is a problem, one needs to look at the root of where it came from and how it developed. This is where good customer service is vital. For example, if a customer follows up multiple times with the same issue, this creates multiple issues, instead of just one. This allows for the base to become unstable and ultimately affects the rest of the pyramid, making it harder to control and this could potentially lead to failure.

So, what is bad customer service really costing your business? For one, your business’s reputation could be tarnished, according to an American Express survey customers are 60% more likely to share a bad customer service experience as opposed to a good one. This leads to a decrease in overall sales and ultimately decreases in word of mouth marketing. This is caused by the nature of customer service interactions.

Another side effect of poor customer service is that your potential leads may not convert into sales. Make a commitment to cut down on customer wait times and give your potential leads great customer service this will ensure lasting first impression and gets your potential leads excited to do business with your company.

Poor customer service could also affect your customers’ lifetime value. Did you know it costs businesses six times more to acquire a new customer than to retain an existing one?

More risks of bad customer service include losing your best employees and entering a profit-sucking cycle. At some point, you have to decide where you need to start cutting the costs to make up for the lost revenue in order to rebuild your brand reputation.

As you can see, good customer service is vital for your business and brand reputation.  What customers expect is simple; better and more knowledgeable customer service interactions as well as staff members being more competent and friendly whilst dealing with these issues. Your reality is the customer perception and this can only lead to your business being rewarded if all aspects are properly maintained, starting with great customer service.

BluWave Service - a companion product to BluWave CRM - is the simple and effective solution for managing all your after-sales processes. Give us a call on (011) 462 6871 or email us at sales@bluwave.co.za to find out how BluWave Service can help you improve customer satisfaction and customer retention in your business.