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Why Poor Customer Service Can Be Fatal to Your Business!



Regardless of the industry you’re involved in, you need your business to stand head and shoulders above the rest. Let’s face it, nobody wants to be second best! Not only do you want to be better than your competitors, you want your customers to feel exactly the same way. And that’s key to retaining loyal customers and having them continuously relate to your brand. Excellent customer service delivers a competitive advantage.

Unfortunately, many organisations consider customer service simply a cost of doing business. Evidence shows that this is a nearsighted perspective, one that not only results in costing businesses a lot, it can also lead to their complete failure.

While it’s true that some market segments and industries seem to get away with poor customer service, these businesses are the exception because customers typically reward businesses that deliver a great customer experience.

It’s interesting that many businesses talk about the importance of customer service, but they’re still confused about just how important good customer service really is to the success of their business. Perhaps they could be excused for the confusion because it’s true that some companies continue prospering whilst offering little or no customer service. However, the fact is that when customer service is done right, it can be a tremendous boost to a company’s bottom line. Regardless of how a company defines success, there’s a very strong and positive connection between customer service and business success.

The constraints of poor marketing can easily be overcome when you deliver great customer service; however, even with the most effective marketing strategies it can be very costly and problematic trying to compensate for poor customer service.

We want you to succeed in business, so in this article we’re going to take a closer look at the impact poor customer service has on businesses, in the hope that we can help guide your business to even greater success.

Damage to your Reputation and your Brand!

Reputation.pngResearch shows that 60% of customers will stop doing business with a brand after just one poor customer service experience; and most of these lost customers could have been retained had the problem been resolved during their initial interaction. So what does this mean? It means that if your business were to provide excellent customer service, you would not only retain your own customers, you would gain your competitors’ customers as well.

A well-trained, friendly and confident customer service team can turn your company into the best version of itself. If you want to grow your customer base and completely revolutionise your company, then you need to learn how to communicate directly with your customers in a positive and helpful way. Customers reward good service!

The reputation of your business is very similar to trust: it can take years to build a good reputation, but that reputation can be destroyed in an instant. This surely tells us just how important it is to protect your reputation, because it’s such an important part of your business success.

Today we live in an interconnected world and, if your customers are dissatisfied, your reputation is going to suffer. Why? Because, with the Internet, your unhappy customer only needs a few minutes on their social media platform to leave a negative review of your business and tell all their family, friends, neighbours, colleagues, in fact the entire world, how dissatisfied they are with your customer service. Not only will you lose existing customers from this negative feedback, you’ll also lose potential customers who read this review. We all know how important word-of-mouth marketing can be, and the last thing you need is to reduce your reach through these important marketing channels.

 Reduced Lead Conversions

Screenshot_8.pngWhen your business delivers poor or no customer service, you’re reducing the ability of your business to convert leads into sales. Don’t think that the term ‘customer service’ applies only to existing customers; it also applies to your interactions with prospects and leads. Let’s say a potential customer has contacted your business and they’re experiencing difficulty in getting answers to their queries from your salespeople. If it’s already difficult dealing with your business, they’re obviously going to make the assumption that once the transaction has been made and their account paid, the customer service is only going to get worse. And their assumptions would be right, because if the customer service is poor at the beginning of a transaction, why would you deliver great customer service once a transaction has been completed?

You must be aware that poor or no customer service upfront creates a very negative impression, and your lack of service will prevent leads and prospects from ever wanting to do business with you.

 Great Service Promotes Customer Lifetime Value

Screenshot_9.pngOne of the best and easiest ways of improving customer lifetime value is to invest in your business’s customer service offering. You would know from your own experience that, when you enjoy a great customer experience, you have no hesitation in shopping at that store again. This proves that acquiring new customers is a whole lot more expensive than retaining existing customers; meaning that it’s much cheaper to retain your current customers than to try and get new ones.

Again, from your own experience, if you’ve had a bad experience with a certain business, you’re hardly likely to want to deal with them again. Again, this shows that a business that delivers a negative customer experience will lose all future sales that could have eventuated from that customer. If your business persists in delivering poor customer service, the result could be a huge strain on your marketing budget because you’ll need to do something dramatic to attract new customers.

 Poor Customer Service Affects Your Employees Too

Screenshot_10.pngWe know that if you don’t adopt a great customer service strategy you’re going to lose customers; however, you could also end up losing your best employees. Whenever there’s a problem with customer service, your loyal employees will be required to go the extra mile to cover the lack of service being delivered by lacklustre employees. While this may not appear to be a huge issue in the short term, it will eventually lead to resentment and burnout among your quality staff members. Those same quality staff members, once they realise your business does not have a positive reputation, could well look elsewhere for a more satisfying position. Let’s face it, no good employee is going to stay if they feel under-appreciated.

Research shows that 87% of employees who love their job are more than happy to go the extra mile for their business’s customers. Most employees want to work for a business that’s appreciative of worker contributions, that encourages new ideas, and treats customers fairly. An employee who works for a business that delivers good customer service will become an advocate for your business, and is more likely to stick with your business through economic changes and business challenges.

Profits Drop!

My_Post4.pngDid you know that it’s estimated that one in three small businesses will fail in their first year; by the end of the second year that figure rises to two out of four, and by the fourth and fifth years the figure increases to three out of four. The reason behind these business failures is that very few businesses prepare a business plan and conduct a formal feasibility study prior to commencing their business. It’s estimated that only 3 and 5% of start-ups have formulated a plan to operate their business.

There’s a very strong link between the ability of your business to achieve its objectives and the effective management of your staff. Your staff members are your most important asset; they’re responsible for achieving your production goals and achieving your financial goals. So, ask yourself these questions: are you retaining existing customers?; are you creating new customers?; do your staff members have a good attitude and great customer service relations?; and - do you follow up with your customers?

If your business is sadly lacking in the customer service department, you could be heading into a profit-sucking cycle. When a business has a damaged reputation it’s not easy to generate new sales, and even your most loyal customers will eventually start leaving. This means you’ll need to increase your marketing strategies to attract new clients, or reduce costs so your company stays in the black.

So, in conclusion, whenever a business loses a customer it costs the business dearly, particularly when the reason for the loss was a negative customer experience. Unfortunately, the effects of losing a customer to a negative customer experience can stay with a business for many years, with both the customer and their family/friends/social media contacts avoiding the company simply because one person had an upsetting negative experience.

How can Customer|Care help your business to improve customer service?