Poor Customer Service Is Costing You Customers

A company that provides poor customer service is running a great risk of losing a large percentage of its customer base. 

According to new research from Accenture, 52% of customers have switched providers across all industries due to poor customer service. In all, the estimated cost to U.S. businesses of customer switching is about $1.6 trillion, the company estimates. 

“It’s a major economy in and of itself,” Robert Wollan, senior managing director of advanced customer strategy at Accenture, tells Marketing Daily

Of those customers who have switched providers in the past year, more than 80% felt the company could have done something to retain them with better live or in-person customer service. Indeed, 45% of consumers say they are willing to pay a higher price for goods and services if it ensured a better customer service experience, particularly if that experience involves a human interaction. 



“[Companies need to] take a hard look about whether they’re getting the balance right between digital and human interaction,” Wollan says. “It would be a mistake to think mediocre digital would outpace human interaction.”

Much of the overall problem comes from a rising expectation across all industries for great customer service, he says. If a consumer can get great customer service in one sector (say electronics), they don’t understand why they can’t get it in another (say, food). That leaves underserving companies open to losing business, he says. 

There are "consistently rising [consumer] expectations,” Wollan says. “Instead of assuming [poor customer service] is going to be happening everywhere, smart companies are looking to catch the eye of customers and bring them across in a way they couldn’t when price was the main consideration.”

While switching touches every industry, the sectors with the highest sectors of customer switching because of poor customer service are: retail (27%), cable and satellite provider (13%) and banking (10%). 

When they receive poor customer service, the first place consumers turn is social media. Nearly half (44%) of consumer said they have taken to social media to complain about a poor service event, meaning companies should closely monitor those channels to understand how service is affecting their business, Wollan says. They could also use social media influencers with large followings to help mitigate the damage, he says. 

“They have an opportunity to strengthen experiences and nights with those who have lots of followers,” he says. “Those are the new dynamics we need to adjust to.”

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