The Downside of Poor Customer Service

Over that past year or so, we have been suggesting ways to improve how insurance is delivered. We have stressed that price shopping can actually cost the buyer more money in the long run; and that developing relationships can lead to a better risk management program.  Now, we would like to examine the downside of poor customer service. Poor customer service can impact a business negatively in many ways. This is especially true for small businesses that rely on repeat business and positive word-of-mouth advertising for their success. Here is a staggering fact: in 2014, U.S. businesses lost $50 billion due to poor customer services. (source;

According to the latest numbers, here is how customers will act after they have received poor service:

  • 59% of people will change agents
  • 30% will tell others not to use your firm
  • 25% will post a negative review on social media

There is nothing worse to an organization than having angry customers and dealing with lost business. Here are some of the outcomes of poor customer services:

  1. Low employee moral
  2. Employee turnover
  3. Reduced income
  4. Loss of potential customers
  5. Loss of reputation

If you do not want your business to be among those companies that have to deal with the above list, your goal must be to use every service problem as an opportunity to impress your customer. When mistakes happen, use proactive recovery as the means to create customer loyalty. Next month we will give you tools to help you recover from a customer service issue.