Industry reports and statistics indicate that poor customer service is now costing U.S. businesses more than $75 billion a year.
As a result, senior management at both the enterprise and small business level have begun to refocus and emphasize the importance of delivering a better customer service experience. It’s common industry knowledge that it can cost five to seven times as much to acquire a new client versus retaining an existing one.
Apart from product issues, analysis of surveys indicates that clients frequently score the following as the main reasons for transferring their business:
- Challenges in resolving issues during the initial contact and follow-up.
- Inability to connect to business personnel who can provide resolution to their question or problem.
- Under trained, unhelpful or rude employees.
- Difficulty in maneuvering through traditional touch tone front end systems.
- Inordinate length of time on hold.
- Multiple departmental transfers.
- Requirement to repeat client information and purpose of call.
In short, clients who do not feel they or their business is appreciated are taking their accounts elsewhere whenever possible. In one survey conducted by a contact center provider, clients who experience poor customer service take additional steps:
- 37% of customers would change their supplier
- 28% would post a negative online review
- 26% would complain via social media
- 13% would tell friends/colleagues
- 10% would inform the media
Many enterprise institutions in verticals such as finance, wireline and wireless services, internet providers and TV services use detailed customer attrition analysis and rates as key business metrics to validate that the value of retaining an existing long-term client is substantially less costly than acquiring a new one. In addition to calculating Customer Lifetime Value, businesses are now beginning to monitor and factor in the impact of negative information and reviews posted or provided through social media resources. The compounded impact of a damaged corporate reputation, the lost lifetime customer spend, and the added expense of client win back programs or acquiring new clients can amount to a significant loss – in terms of both revenue and reputation.
