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How customers react to poor service

Blog
21st June 2016

The fact that good customer service is important to the success of a company should now be common sense. Consumers have higher expectations than ever before. Should a customer be disappointed, they are not just buying elsewhere – they also make sure that the entire Internet knows about her disappointment.

But how can the importance of good customer service (or rather, an all-around better customer experience) be expressed in figures? How many customers are lost if you do not offer satisfactory service?

– Forbes magazine assumes that 68% of all consumers terminate a business relationship if they are not satisfied
– The Peppers & Rogers Group says that 70% go to the competition, after one bad experience
– American Express even assumes that 78% of all customers cancel the transactions when they are disappointed.

If you set out to search, you’ll find an abundance of studies with similar results. Of course, the methods between highly controlled academic studies and dubious telephone surveys vary (in which consumers are asked what they would “probably” do, instead of analysing their actual behaviour). In addition, most of these studies summarise their results in a single figure together – although it probably makes a significant difference to the nature of products and services or which company it is exactly. Thus, banks are difficult to compare with the retail or IT service …
But despite all of the limitation to the surveys, the figures do clearly show that a high percentage of consumers are no longer willing to accept poor service. Between two thirds and three quarters of all customers are turning away after a bad experience and they will buy elsewhere.

This marks a significant change in the minds of consumers. They are no longer limited to a particular product or a discounted price, also the quality of service plays a major role. Many customers would rather pay a little more if they are treated courteously – service has become an essential purchase criterion.

A similar shift is taking place in strategic management. Instead of focusing mainly on profit maximisation and cost reduction, many chief executives now consider improving the customer experience to be a top priority. The reason is clear:

Today’s consumers expect outstanding service. Even if your products are great, you must seek a compelling customer experience. Otherwise, most of your customers will simply shop elsewhere.
Author: Thomas Berlemann, CEO Webhelp DACH


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