Have you ever had to wait an extra hour because of poor customer service? Say someone forgot to order parts even though they knew the parts would be needed two weeks in advance of the repair?
How much time do you spend dealing with services or products that do not work as needed on a regular basis?
Several subpar customer service experiences over the past few weeks have prompted me to research the actual impact of poor service. For example, I am in the middle of replacing my homeowner’s insurance. My wife and I have chosen the company. I receive a proposal from one person and pose questions about it. No response for three days. In the meantime, someone else from the same company contacts me. I assume they are working as a team (not true). I ask the same questions. I finally go online, complete the application, and we will shortly change insurance. How much time did I waste on this mundane task?
I found one useful study conducted by Genesys in collaboration with Datamonitor/Ovum and Greenfield Online. This study is dated 2009 so I can assume that the numbers have probably become more significant.
Key findings:
- Poor service was an $89 billion annual problem. Of this, $32.4 billion is from business that is abandoned or lost to an entire industry. $50.6 billion is the cost of customer churn and defections within an industry.
- The average value lost per consumer due to poor service is $289 per year. The incumbent loses the business, or the customer decides to abandon the product or service altogether.
These numbers dramatically understate the impact of poor service on our economy because they do not consider the implications for the people dealing with poor service. For example, how much time individuals spend waiting on the phone to get an issue resolved. Or, the amount of time spent trying to solve a software issue that could have been done in a quicker way could have been more quickly done if the user interface had been better (a big one for me since I use a lot of Microsoft products).
Unfortunately, I cannot find research that covers this aspect of the customer service problem. I am fairly certain that our economy would grow faster, and there would be a lot less frustration (and perhaps lower blood pressures) if customer service improved in our everyday lives.
