Frustrated consumers cost companies billions each year

During the holidays, brands are often on their best behaviour, sending dozens of emails to remind us how special we are. But the reach often falls short of the goal. As a consumer, isn’t it an amazing and peculiar thing when stellar customer service really stands out?
Chris Forrest
November 28, 2023

During the holidays, brands are often on their best behaviour, sending dozens of emails to remind us how special we are. But the reach often falls short of the goal. As a consumer, isn’t it an amazing and peculiar thing when stellar customer service really stands out? I’m talking about the delivery of an exceptional customer experience in the worst of times: the frontline employee at the airport counter who has a dozen irate travelers to deal with but remains calm and focused on problem-solving; the voice on the other end of the help line that you’ve called five times who finally tells you they will stick with the issue until it is one hundred per cent resolved; the in-store representative who steps forward when their peers turn their eyes away pretending they haven’t noticed the troubled customer, or worse, look down at their phones at the latest reel of Karen unleashing on some anxious teenager at a fast food restaurant.  

As a society, and perhaps just part of our human nature, we can easily default to whining and complaining about almost anything under the sun. Those of us who have worked in the service industry at any point in our journey often become jaded about the person on the other end of the transaction because, well let’s face it, people can be exhausting to deal with at times. Demanding, ignorant, illogical, entitled. That’s table stakes when it comes to customer service. So, let’s say here that we’re talking about reasonable people with reasonable expectations of service and brand experience, not the very small percentage who end up being taped to their seat on Southwest Airlines.  

Switching brands with one click

As costs rise and inflation bites, customer service is even more important. 2021 research from Qualtrics and ServiceNow revealed “80% of customers said they have switched brands because of poor customer experience, and 43% of respondents said they were at least somewhat likely to switch brands after only a single negative customer service interaction. Poor customer service was the most cited reason for switching brands.”

And to further underline the issue, the report highlights the ease with which consumers can switch: When switching costs are close to zero and customers are more willing to switch brands due to poor customer service, getting the service experience right every time is more important than ever. In fact, U.S. companies risk losing $1.9 trillion in consumer spending every year because of poor customer experiences.

According to Strategy magazine, substandard customer service is costing companies billions. In 2022, research firm IMI found that “over the last year alone, 100 million North American shoppers have left a retail store out of frustration, and 80 million have done the same at a grocery store. Those frustrations continue online, as 95 million Americans and 9 million Canadians have closed an app while shopping due to pain points”, adding this all amounts to $30 billion lost “due to frustration with a shopping experience across all platforms annually.”

For all the blogs and business books written on the subject, all the training sessions and bold new customer manifestos delivered by incoming CEOs, all the brand and logo re-launches, and the mind boggling amount of money spent acquiring new customers versus retaining loyal ones – despite all of this, we are all, to a person, lifted on the wings of hope for humanity when a company representative takes accountability for the expression of a brand promise.

In other words, it’s a rare enough thing that it sticks out.

The best brands, the best companies, the best organizational cultures never cease to continually improve in service delivery because they understand the cost of doing otherwise. And it ain’t easy, that’s for sure. More so today as workers seek hybrid situations that keep them out of daily contact with their colleagues and often carry with them a nagging skepticism about their employer’s commitment to them, let alone to the customer.

It takes a top-down investment, ongoing commitment,and belief in placing the highest priority on service and experience, starting with a few basic cornerstones:  

Systemic Accountability

Everyone is a brand ambassador. And the buck always stops wherever the customer stands. It’s not just the sales force or front desk employees who should know everything about your company, the nuances of the service you provide, what differentiates you in the competitive marketplace. Everyone from administration to human resources and even your vendors should know what makes your company better than the competition. Brand communications training, order up.  

Training

We all feel more invested in a brand we represent when we are pulled into it and given the tools we need to perform. A recent issue with a major financial institution gave me some horrifying insight into the lack of training on very basic procedures, such as connecting a debit card to a new account. Even when escalated to a senior “customer experience manager”, it was as though I was asking them to build me a drone capable of exploring Mars that I could control from my banking app.    

Auditing and Learning

Call it Mystery Shopping. Analyzing real-time data. Reading and acting on all those ‘quick surveys’ you collect. Following up when someone in the chain of communications doesn’t do their job. Have you ever submitted a review with all ones and zeroes? Did you hear back? Exactly.    

Rewarding and Amplifying

Make a big deal out of it when you hear from a customer. I’ve written a decent number of notes to large companies in which I described a situation and an example of superb service – even naming the employee – and I believe to date the response rate sits at about 20 per cent. Imagine a world where a customer takes the time to celebrate your brand experience and you don’t even respond with a bot that says ‘thank you for your note consumer, please click here to find out more about our amazing impersonal business.’ Come on, it’s SO easy these days to amplify good news. Make that employee a hero for the day. Tell a story. Use them as a case study in your next uninspired mandatory training session.

Replicate. Replicate

Find what’s working and do more of it. Address and own the stuff that’s holding you back. Create compelling training and orientation programs. Get third party experts to help make you better.

As Ray Kroc said, “Look after the customer, and the business will take care of itself.” And he knew a thing or two about replicating a winning service model.

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