by Robbie Richards
Ask a business owner what their greatest cost is and you'll hear things like:
- Product development
- Employee overhead
And, while all are important to growing a successful business, and come with large costs, they are not the biggest costs.
The truth is, the thing that takes the biggest chunk out of your bottom line doesn't actually show up as a line item on any balance sheet or expense report. What am I talking about?
Bad customer service.
Let's look at two numbers:
- 89 percent of consumers have stopped doing business with a company because of a bad experience
- 95 percent of those people will tell others about it
Poor customer service is the fastest way to lose existing customers, and repel potential clients before they ever get a foot in your door, or click through to your website. In fact, 86 percent of consumers will not buy from a business if it has negative online reviews.
Bad service costs U.S. businesses alone a whopping $84 billion a year, and over $338 billion worldwide.
Despite the numbers, most companies still fail to make customer support a No. 1 priority. More attention and resources are given to acquisition, rather than retention. And, this is where it all starts to go downhill. Existing customers jump ship and go the competition. You end up paying six to seven times more money to acquire a new customer, compared to keeping an existing one. Increased attrition and higher acquisition costs start to burn your bottom line.
It's a recipe for disaster. But, it's completely avoidable. In fact, if handled properly, customer service can be turned into a powerful competitive advantage that can help retain loyal customers and even win new ones from your competitors. By 2020, experts predict customer experience will overtake price and product as the key brand differentiator.
Still not convinced?
Check out the infographic below from the team at JitBit. It takes a close look at the financial costs associated with poor service, identifies the top reasons why customers might be jumping ship over to the competition, touches on the segments of your customer base who are least tolerant of bad service, and highlights how investing more in great support can increase your bottom line 25 to 95 percent.
Robbie Richards writes for JitBit, a company that provides live chat and helpdesk software to help businesses simplify and improve their customer support.