The Cost of Bad Customer Service

Author: Chris Miller
Last modified: March 2, 2021

Customer Service is perhaps one of my biggest pet peeves, and one of the few things in life which can make my blood boil. Most companies view the cost of customer service strictly on their bottom line, but the true cost is the burden on your customers. As Warren Buffet is known for saying about time – ”It’s the only thing you can’t buy.”

Let’s start with a bad customer service experience.

Six months ago I alerted one of our vendors to a problem with their service which was negatively impacting us. This was a technical problem which would require senior staff to get involved, and this represented a huge  bottleneck. We knew the problem was with their equipment, but none-the-less we were subject to a long drawn out troubleshooting process conducted by the front line staff. We were beholden to the gatekeeper to resolve this issue.

While our contact did reach out to us periodically to work through this process, getting them to send a technician to our office was deferred. Even when the tech showed up, they performed some rudimentary tests and promptly bailed assuming the problem was not on their end. Blood boiling, I summoned the tech back to our office where we found a $5 part on their end was the cause of the service degradation.

The time burn was colossal, financial costs non-trivial, not to mention the frustration. I still love this company which shall remain nameless, however this highlights an opportunity for them to become more customer focused. 

Let’s talk about a great customer service experience.

I recently purchased an e-bike from a local store in a move aimed at getting out of my car and getting more exercise. Last week my bike broke down unexpectedly, and I found myself stuck. I called the bike store at 5:15pm and told them of my predicament. Within 10 minutes an employee showed up (on his bike) with tools in hand to help resolve the issue.

One reason I bought my bike at Current E-Bikes was because they offered free lifetime tune-ups. It’s a great perk and indication of how they are customer centric. Rescuing me nearby is not part of this service, but the fact they went above and beyond at their expense earned them a top spot on my list of companies I will heartily recommend.

Amazon is well known for their “customer obsession.” In a 2016 letter to shareholders, Jeff Bezos said the following:

“Customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.”

It doesn’t matter what kind of product or service you offer, there is always room for improvement. As business owners this is something we need to continually remind ourselves. While we do have to consider the hard costs of providing customer service in relation to the profit margins of the product or service we sell, we also need to consider the hidden costs of bad customer service.

Priceless Marketing

When it comes to marketing, we all rely on our customers for referrals. While a happy customer will often praise your service when asked, an unhappy customer will seek opportunities to voice their experience. This negativity is a catalyst, resulting in an exponential impact on your growth, and a real cost on your customer acquisition costs. A referred customer comes to you with a high level of trust, and has a substantially lower acquisition cost than a customer who is new to your company.

Gatekeeping your customers with inexpensive and less knowledgeable “front line” staff may reduce your support costs, but you will pay handsomely in marketing and customer acquisition costs. Establishing an efficient escalation process in your support organization will minimize the time expenditure and frustration for your customer, and if properly handled will delight them and produce an advocate for your brand.

Good customer service requires continuous analysis and refinement. Consider establishing a process you conduct periodically to assess your customer experience so that you can make incremental improvements. Customer satisfaction surveys are an easy way to accomplish this, and although not everyone will fill them out, you will hear from your customers who are beautifully, wonderfully dissatisfied.

Join us in taking a moment to reassess your customer service strategy, and take a step toward becoming more customer obsessed:

  • Add functionality to your website to be more engaging
  • Conduct a Customer Service assessment and analysis 
  • Ask your customers – Create a Customer Service Survey
  • Add ticketing queues
  • Provide IT Support

Please get in touch via email or schedule a brief meeting to discuss enhancing your customer service strategy.

We also want to learn from your good customer service examples! Please comment below what made your experience so positive:

Chris Miller

About Chris Miller

With over 20 years of experience in the IT technical field as a system administrator and operations manager at a local internet service provider, Chris founded Cloud Brigade to support the growing number of companies adopting internet technologies in the cloud.

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