In news that should somewhat vindicate those of us who have spent countless hours being passed around from one unhelpful/unfriendly customer service rep to another, a new study shows that when we “vote with our pocketbooks” by switching service providers, brands, or retailers, it truly does make a major impact on those companies. New research done by NewVoiceMedia reveals that U.S. companies considered to have poor customer service are losing a whopping $41 billion a year.
Take that, endless hold music!
The survey revealed that 44 percent of U.S. consumers are taking their business elsewhere as a direct result of poor service, and 89 percent of that group have switched at least once or twice in the last year.
The top frustrations that are causing these customers to abandon one company for another include lack of appreciation from a business (53%), unhelpful/rude contact center staff (42%), being passed around multiple agents (32%), agents lacking the knowledge required to answer a query (29%) and being kept on hold (25%).
Based on the average amount that these customers spend at a company before leaving ($392), it is estimated that when they abandon ship, they take $41 billion with them each year. And this doesn’t even include the cost of replacing lost customers and the significant impact of negative word of mouth. After a negative experience, 58 percent of customers said they would never use that company again, while half would tell friends and colleagues not to use the business. And as we know, word of mouth in the digital age is more significant than ever; a third (34%) of consumers admit they would retaliate online by posting a bad review or complaining via social media. Among consumers between the ages of 25 and 34, this figure jumped to nearly 60 percent.
Age also plays a role in how tolerant customers are of a poor service experience; 16-24 year-olds, while they are the most tolerant when it comes to bad interactions (11 percent would take no action at all after a negative experience), they are also the most likely to turn to social media when they do decide to act, which is often the most detrimental means of retaliation.
But there’s always a second side to the coin, and it stands to reason that if offering crap-tastic customer service will lose a company major money, providing good customer service can pay off handsomely. After all, all of these people need to take their $41 billion somewhere, right? Seventy percent of respondents said that good service had a considerable influence on their loyalty. Furthermore, 69 percent would recommend the company to others, and half would use the business more frequently. Forty-two percent said they would even be prepared to spend more money with that business.
“With $41 billion of revenue being transferred between companies, this research reinforces just how much influence customers have on a business’s success”, said Jonathan Gale, CEO of NewVoiceMedia, in a news release. “Great customer service is the critical differentiator and investing in providing personalized and engaging customer experiences will help businesses succeed in retaining customers and securing new business.”
Like it says in Harry Potter: “We are only as strong as we are united, as weak as we are divided.” Apparently, this goes for both defeating The Dark Lord and vanquishing terrible customer service…because if incessant hold music and downright rude representatives aren’t instruments of the Death Eaters, we don’t know what is.