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When Customer Service Goes Bad, One Of These Reasons Is Likely Why

“Over 50% of customers we’ve surveyed are restless, skilled at shifting spend and intolerant of poor [customer-service] experiences,” said Forrester CMO Victor Milligan on a recent company podcast. Plenty of similar research backs him up: An American Express study showed that 33% of those surveyed would consider ditching a trusted brand after just one bad customer-service experience, while another report found that 59% of folks might tolerate a handful of customer service frustrations before they move on.

Given the dizzying number of buying options now available in every category—from wireless providers to razor blades—disgruntled customers can and do switch loyalties easily, quickly and at great cost to marketers: Recent studies have put the annual cost to business of customer-service related losses $75 billion or more. Small wonder conventional marketing wisdom says it costs at least five times as much to win a new customer than it does to retain an existing one (some research puts that number much higher.)

So where does the relationship break down? And how can you avoid the churn? As it turns out, when customer service goes awry, the reason can usually be traced back to one of a handful of mistakes:

The Interaction Felt Chilly and Impersonal

Customers crave a human connection, even when they’re interacting with your company via digital channels. A recent Accenture study showed that 33% of those who abandoned a business relationship last year did so because personalization was lacking, and that 48% of consumers want specialized treatment for being a loyal customer. That’s why you’re hearing so much these days about the importance of “emotive experiences” in customer service. It really just means that people expect a mom-and-pop level of recognition and kindness even from huge corporations. In fact, they’ve come to demand that level of attention, because companies like Zappos, Chick-fil-A and Toyota already deliver it. “Companies that provide exceptional customer experiences don’t just act like they care about customer,” says Rick Parrish, a principal analyst at Forrester. “There is a real difference between companies that, through data analytics decide it’s a good strategy to put a face out there of caring about customers, and companies that actually just really do care.”

It Took Too Long

Customers want their issues resolved on their terms and in real time. And the younger they are, the higher their expectations: In one study, 71% of millennials said the most important thing a brand can do is value a customer’s time. Those same buyers expect companies to respond to a Tweet or a Facebook message within an hour. Speed and efficiency is especially crucial when solving simple problems. As SaleMove co-founder and CEO Daniel Michaeli likes to say, “Getting a $50 refund shouldn’t eat up $100 of anyone’s time.” Keeping CS in place in some capacity 24/7 is ideal, but if that’s not economically feasible, cutting-edge companies will proactively inform their customers, with complete transparency and honesty, how and when a customer service representative will be in touch (e.g. phone call or, increasingly, via chat or email). Of course, it’s critical to identify your business’ peak customer service times and ensure coverage then.  

It Was Too Complicated

Making customers jump through hoop after hoop to solve a problem erodes their patience as well as their confidence in your brand. For starters, they shouldn’t have to click through several webpages to find your company’s customer-service contact—put that info front-and-center. Better yet, if you’re considering phasing out your phone-centric support approaching, consider omitting a phone number all together as a first step toward true digital customer engagement. Chat, after all, is the preferred channel for Millennials.  By using a digital first customer support system, your reps will additionally have full seamless contextual history when interacting with a customer so they don’t have to repeat their story to each new representative in the interaction. (This is a common gripe: 89% of those surveyed by Accenture identified it as a major frustration. And CapGemini said this gaffe resulted in the highest level of frustration.) Finally, no one wants to feel as if they’re dealing with the farm team: Trust employees to devise creative, swift solutions. “To prevent customers from switching to competitor you need to empower the right people to make decisions without having to wait for permission,” says DotActiv blogger Darren Gilbert. Because leaving a customer satisfied is more important than complying with a rigid policy.

And, in the long run, it’s almost always more profitable.