Customers might not tell you that they have had a bad experience with your business — but they will tell their friends, family and co-workers. Many will even spread the word with a poor rating on various review services like Yelp and Google Places for the whole world to see. The effects of poor customer service ripple far beyond the revenue lost with that one person.
Customers are the foundation of success for any business, and if customers are not treated right, the business can lose its reason for existence. If you are not taking care of your customers, and your business becomes known for poor customer service, you can expect several things to happen — and none of them are good news for your business.
Rare is the customer who will stick around through repeated experiences with poor service, especially in a competitive market where they can easily take their business elsewhere. When your customer walks, you lose not only that revenue, but also you potentially lose the word-of-mouth of advertising that only a satisfied customer can provide. It takes more effort to attract new customers than it does to retain a valued one, so shedding customers is something no business can afford.
Word-of-mouth has two sides to it. Just as new customers seek out businesses based on recommendations from people they know, prospective customers will avoid a business when they have heard first-hand accounts of poor customer service. People tend to believe firsthand accounts from their friends and acquaintances more than they believe impersonal sources such as advertising. They also give more weight to negative reports than to positive reports. Prospective customers that might have found their way to your business will instead check out what your competitors offer.
It starts when dissatisfied customers talk to people they know about the poor service they got, and it escalates when they express these feelings online. Not only can tweets, Facebook posts and bad Yelp reviews go viral, but these statements can also last forever, potentially becoming only a Google search away from tarnishing your business reputation.
Once a business is known for poor customer service, it is difficult — if not impossible — to repair the image. The results go beyond loss of customer, because other businesses do not want to partner or associate with a business that is sliding downward in customer retention. If you can not trust a business to take care of its customers, it is even more difficult to trust that business' agreements with its partners.
Employees know when something is not right with the business they work for. If they see repeated instances of poor customer service, they are likely to start looking for opportunities with other companies. Dealing with dissatisfied customers makes their jobs more difficult and eventually the working environment becomes toxic.
Management that does not care about its customers probably does not care about employee well-being, either. The resulting high employee turnover further tarnishes the company’s reputation, and it creates more costs because of the increased need for recruiting, hiring and training of new employees.
Poor customer service is bad for your bottom line. The shrinking customer base results in fewer sales, which leads to direct loss of revenue. Add to that the increased costs from employee turnover. A business that tries to salvage its reputation by boosting advertising and public relations efforts will have additional costs added to the mix. If no effort is made to improve service to get those lost customers back, the result will be a downward spiral that could eventually lead to you losing your business.
