We know the qualitative, anecdotal impacts of bad customer service—most of us can easily remember the last time we were on the receiving end of it. But a recently updated Forrester report, “Transform the Contact Center for Customer Service Excellence,” has quantified the impacts of bad customer experience.
In sum? In sum? The effects of bad customer experience really add up.
Customer experience, or CX, goes hand in hand with customer service. It’s the sum of a customer’s experience with a company, often with an employee who represents the company, over the entirety of his or her relationship with that company: from initial awareness and discovery all the way to their becoming full-on, brand-champion loyal. In the end, transforming customer service helps businesses and their customer service employees deliver great experiences, according to the updated findings.
First, the bad news
Forrester says companies have an increasingly hard time delivering on the customer service dream due to complex software solutions, evolving customer demands, and the trickle-down, tactical fallout of mergers and acquisitions.
...which comes at great, and negative, cost. The Harvard Business Review reports that customers are willing and able to punish a business for bad customer service, which greatly impacts their experience. In fact, they’re more willing to punish bad customer service than reward good customer service. Furthermore, the Forrester report finds that customer satisfaction levels (CSATs) for customer service across industries decreased for four years in a row between 2013-2016.
Poor customer service experiences lead to increased service costs
The costs of a poor customer experience are higher than a bad review or negative word of mouth—Forrester estimates the unnecessary costs to retailers for channel switching is $22 million. Approximately 69 percent of customers switch to other channels—usually the phone—when online customer service is lacking. But almost half of adults in the U.S. making purchases online will give up on their shopping cart if they can’t find a quick answer to their questions online.
Poor customer service experiences also lead to customer defection and service loss
Let’s say a company has 4 million customers, and each of those customers spends $100. That means projected annual revenue is $400 million. How does that break down? Three out of five adults who shop online say they’re unlikely to return to a website if their customer experience is below par. But a teeny percentage (roughly 2 percent) will complain to a contact center. For our hypothetical company, that represents an annual loss of $240 million. It's critical for a company to respond to these facts.
Now for the good news
Half of those surveyed say they want to improve their differentiation in the market—which is actually great news, as some say customer experience is your only differentiator. The interaction between customers and companies, and how companies respond to consumer complaints, can have tremendous impact — to neutralize frustration, create loyal customers, and even create new customers through social media interaction and the recommendations that come from loyalty. And more than three quarters of the surveyed decision makers in the customer service department say improving CX is among their top priorities. So, businesses appear to be operating with good intentions toward consumers.
Bottom line: If your intentions are good, but you’ve yet to implement that solution, not to worry. You could give your FAQ page a makeover or try using video for customer self-service, giving online customers the opportunity to self-help.