In today’s global marketplace, competition is fierce, and providing a good customer service experience is more important than ever.
68% of consumers say they are willing to pay more for products and services from a brand known to offer good customer service experiences.
On the other hand, poor customer service can be destructive for your company. When the Helplama team surveyed a large number of consumers throughout the US, they found 45% of customers would break a business relationship with a company within the same day of experiencing poor customer service.
In this article, we will go over some of the major consequences of poor customer service as well as some tips and techniques for improving customer experience.
Table of contents:
- What is bad customer service?
- The true cost of poor customer service
- 5 examples of bad customer service and how to fix them
Bad customer service can be defined as the failure of a business to meet customer expectations.
The most common reasons for customer dissatisfaction are failure to provide real-time support, unskilled customer service representatives, long response times, and so on.
The customer experience (CX) continues to be a decisive factor for many customers. This study shows that customer experience is projected to outshine price and product as the key brand differentiator. This is why It is important to understand how providing a bad service experience can hurt your brand.
Let’s look at some of the impacts of poor customer service and how it can affect your business:
1. Loss of reputation as a result of negative WOM
Consumers like sharing their thoughts on products and brands. Particularly in this digital age, brands are held more accountable for their actions than ever before.
Studies found that 85% of consumers talk about their experience with a brand through online reviews. And the fact to note is that 72% of shoppers trust online reviews as much as personal recommendations.
So, a negative customer review about a bad experience can be extremely damaging to your business’s reputation. And it’s worth keeping in mind that it takes 12 positive customer experiences to make up for one negative experience.
2. Leads don’t convert
Poor customer service kills conversions. In fact, 78% of customers have backed out of purchase due to a poor customer experience.
Let’s understand with an example of poor customer service: Suppose you contact a company’s support to get info about their product or service but never hear back from the company.
Would you be going back to that company in the future? Most likely, not!
90% of customers rate an “immediate” response as essential or very important when they have a customer service question. A bad service experience can restrain potential customers from buying your product or service.
3. Risk of losing loyal customers
Your loyal customers are your best advocates, but if you don’t value them or recognize them based on their loyalty, you risk losing their trust.
A Helplama study found that 27% of customers reported an end of a business relationship due to the company’s failure to recognize them based on loyalty. Existing customers who do not feel valued or respected are more likely to take their business elsewhere.
This can also lead to an increase in your business expenditure. Research shows that acquiring a new customer can cost five times as much as retaining an existing one.
4. Loss of revenue
Poor customer service costs businesses $ 300 billion every year!
Poor customer service can trap your company in a profit-sucking cycle. When your reputation suffers and existing customers begin to leave, it will be difficult to generate revenue. The only options you have now are to cut costs or spend resources to acquire new clients.
Even if you cut expenses to compensate for lost revenue, you’ll still need to improve your customer service team through training or new recruits, which requires additional resources.
Spending money on marketing to bring in new customers makes no sense unless the underlying problem is addressed.
5. Risk of Reducing Employees Morale
Another consequence of poor customer service is the loss of confidence among your employees.
When customer service standards worsen, the number of queries can increase, increasing the workload for your support team.
This often leads to employee burnout and dissatisfaction. It can be demotivating for your support team to be subjected to irate customers without a proper structure in place to handle their complaints.
If your company develops a bad reputation, your top performers could also leave. Nobody wants their name to be associated with a negative brand.
Let’s look at some examples to see how customer service affects business and what you can do about it:
1. Failure to provide real-time support
Unresolved customer service issues can be a frustrating experience for your customers.
Here’s a surprising fact we found: 68% of customers got stuck in the automated phone self-service (IVR) and found it difficult to reach a customer service representative. That’s the last thing a customer would want.
Some other examples of why businesses fail to provide real-time support to their customers are:
- Failure to respond to phone calls, emails, or social media complaints
- Support services only available at inconvenient hours
- Not being able to resolve issues quickly
- Not having enough service touchpoints in place
64% of customers want to shop with companies that can meet their needs in real-time. Failure to reach your service team or a lack of response indicates to customers that the company does not care about their problems or feedback.
How to fix this:
a. Live chat & chatbots
Chatbots and live chat technology are now at the forefront of customer service, thanks to the growing popularity of text-based communication and social media platforms.
Offering real-time support allows your customers to:
- Contact you through channels that are convenient for them,
- Have their concerns heard and addressed, and
- See their feedback implemented.
b. Provide omnichannel support
In our survey, 65% of customers reportedly ended a business relationship because they have to explain their situation every time they contact customer support.
The most important aspect of a customer support system can be the customer’s ability to interact and process their concerns via the medium of their choice.
An omnichannel experience allows you to better understand your customers and optimize their interactions across different channels. In fact, customer retention rates are 90% higher for omnichannel vs. single channel.
2. Long response times
Long wait times are a prime example of bad customer service. Nobody enjoys waiting, especially if the customer is already irritated by a problem with a product or service.
According to Helplama’s survey, almost 6 out of 10 customers stated that long wait times on the phone to talk to a support representative was a cause for ceased business relations.
Additionally, look at this graph showing how long response times can hurt your business:
Customers are aware that there are better options than long hold times, so it is critical to reduce your queue times as much as possible. In fact, the most important attribute of good customer service, according to customers’ themselves, is a fast response time.
How to fix this:
a. Offer callback
A survey was conducted to determine whether callers preferred waiting on hold or receiving a callback once an agent was available. A callback was preferred by 63% of customers.
To provide the best possible customer experience, offer a callback as soon as possible during the call. It’s a good idea to offer it no later than 90 seconds of hold time.
b. Have a good understanding of your processes
The first step is to make sure that your agents understand their roles and responsibilities. Create a workflow with the goal of handling customer queries quickly and efficiently. This ensures that your service team’s standard of support remains consistent.
c. Offer a Resolution Immediately
32.3% of consumers believe that customer service departments should be answering immediately—with no hold time. Customers will not have to call back or look for a different support channel if your service team resolves support issues effectively the first time they arise.
d. Escalate the issue to senior leadership
It can be important for your support team to avoid unnecessary escalations. However, make it a point to develop an environment in which employees are not afraid to seek additional help.
3. Not measuring the quality of customer service
No matter how much effort you put into providing a good customer service experience, if you do not measure the quality of your customer service, your efforts most likely would not work.
Here are some insights you might miss if you don’t keep track of customer service quality:
- Issues with your product/ service
- Support team performance
- Insights on your customer satisfaction
- Consistent communication gaps or issues
Some ways to measure the quality of service:
a. Collect customer feedback on all touchpoints
By collecting feedback from your customers at different touchpoints, you clearly show that your company values their opinions and concerns.
Additionally, feedback also allows you to analyze and leverage customer service data to make better decisions about how to allocate resources and time.
Have a look at this customer feedback loop by HubSpot:
b. Use Voice of Customer (VoC) programs
The most important step to improve customer experience is to listen to them. This is why customer feedback, often known as Voice of the Customer (VOC) is crucial.
A Voice of Customer (VoC) program can help you understand how your customers feel about your company, product, or service, and provide you with insights that can help you improve customer experience.
c. CSAT surveys
Surveys are the most direct and honest method of gathering organized consumer feedback.
CSAT surveys are an excellent tool for measuring customer satisfaction at different touchpoints.
To gain insights, CSAT survey links can be sent to your customers via social media, emails, or any other touchpoint.
4. Unskilled customer support representatives
A good customer service culture starts with your service team.
Customer service staff turnover can have a significant impact on quality. To manage customer concerns, you need people who are knowledgeable, experienced, and trained. According to a Helplama survey, 50% of the respondents said that they took the business away from a company due to unskilled support representatives.
Several businesses do not prioritize implementing the right customer support training program, which frequently derails the customer experience.
Here are some things to keep in mind:
a. Don’t omit key information
The best customer service representatives must understand how their companies’ products work. After all, if they don’t know your product from top to bottom, they won’t be able to help out customers when they run into problems.
b. Ensure qualified agents
Finding the perfect hire for a support team can be challenging. If you want to provide good customer service, you must hire qualified agents who enjoy assisting others and solving problems. Look for candidates who are good communicators and listeners, who manage their time effectively, and who demonstrate empathy.
c. Time to train your customer service team
Training on topics such as communication skills, new products/services, and dealing with difficult people can help your support personnel in providing a better customer experience. Utilize team meetings to address obstacles and look for more effective ways to resolve customer problems.
d. Maintain a professional attitude
Customer service can have a significant and long-term impact on a customer’s perception of a company. A good customer service representative should be able to relate to anyone and deal with dissatisfied customers.
Maintaining a positive attitude in customer service entails putting oneself in the shoes of the customer and viewing the problem through their eyes.
5. Lack of privacy
Customer privacy has always been important, and it is now more important than ever as concerns about privacy protection grow. In fact, 46% of the respondents faced privacy issues with a company and reported breaking of business relations due to privacy concerns.
Personal information that is misused, mishandled, or inadequately protected can lead to identity theft, financial fraud, and other costly problems.
Here’s how you can ensure the privacy of customer data:
a. Show trust badges while providing service
Trust badges are symbols that confirm the legitimacy of your website or business. A trust badge or seal for your customer service experience can encourage customers to trust you.
b. End-to-end encryption
End-to-end encryption is a security method that ensures the confidentiality of your customer communications. End-to-end encryption ensures that neither hackers nor other third parties have access to customers’ private encrypted data.
Customer service is a crucial aspect of your business that can make and break things within a short time. Sometimes, you don’t even get to realize that you have delivered a poor experience. In fact, for every customer complaint, there are 26 other unhappy customers who have remained silent.
Still, several businesses still consider customer service to be merely a cost of doing business. This attitude frequently leads to negative customer experiences and costs businesses a lot, not just in revenue.
Investing in customer experience and using customer insights to continuously improve service is one of the most effective ways to increase revenue, improve brand identity, and achieve business growth. In every situation, ask yourself, “Are we providing the best possible customer experience?”