3 HIDDEN COSTS of Poor Customer Experience that could Kill an Organisation


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This story is a version of a post published here.

With more and more businesses becoming customer centric, it is impossible to ignore customer experience these days; especially when the experience is poor.

A bad customer experience can lead you to pay higher costs in terms of loss of both loyal and potential customers. In one of their research reports, Walker Info interviewed over 300 customer experience professionals from multinational B2B organisations across several industries, and shared this interesting insight:

How will customer experience shape in 2020?

Image Source: Walker Information, Customer 2020 Report

The chart above shows how customer experience will overshadow the impact of price and product in your business strategy by 2020. Clearly there is a need for companies to focus on improving customer experience and also avoid poor customer experience. With the power of product and price falling with time, companies need to critically assess their current customer experience situation, because overlooking poor customer experience today could cause irreparable damages in future.

What is the cost of poor customer experience?

Customers are becoming more informed and connected every day, and the increased expectations of customer will have to be addressed efficiently. This has become a double edged sword for companies. One one side, the customer expectation is on the rise and technology is enabling businesses to deliver to that expectation. On the other hand, customers can easily voice their unhappiness with a company’s product or service and adversely impact its business. The following infographic from Provide Support, highlights some key impacts of poor customer experience:


Image Source: Provide Support

Here are the other hidden costs of bad customer experience:

  1. Sales efficiency goes down

  2. As surprising as it might sound, this is particularly true in case of B2B businesses. It is easy to imagine customers voicing their concerns and sharing negative feedback against a consumer focused company, but in B2B the word about poor customer experience travels faster; especially in the case of SaaS companies. In enterprise sales it is common practice for a prospective client to ask for reference so they could do some background check on their prospective supplier. If your existing clients are not having a great experience working with you, you’d have a tough time getting a reference that would help you push the sale forward. Moreover, poor customer experience will lead to higher customer churn and therefore revenue targets would be extremely difficult to meet with just new sales.

  3. Marketing loses its charm

  4. I recently wrote an article discussing how great customer experience trumps marketing where I present a case how great customer experience can catapult your marketing efforts. The reverse is also true – if your customer experience is not as great as your marketing, people will know. With the advent of the internet era, marketing has also largely become digital. While digital marketing gives companies an opportunity to directly engage with prospective customers, it also brings the truth about the company’s poor customer experience out in the public. Here’s an example I shared in my earlier blog:

    Ola Corporate LinkedIn Ad

    Image Source: Ola Corporate LinkedIn Ad

  5. Hiring good talent becomes difficult

  6. Good employees are hard to find in today’s competitive world. While companies are looking through candidate profiles and checking references on prospective hires, candidates do their own background research about the company. The by-product of poor customer experience is unhappy employees, and it is not very difficult for prospective candidates to find that out. Smart professionals who are eager to grow and make their mark at the workplace, look for a company where they will be appreciated and feel empowered. And we all know that customer centric companies are generally great employers too. On the other hand, companies that don’t have a customer centric culture are driven by KPI’s that become hard to achieve and therefore difficult for employees to sustain.

What’s interesting is that it is easy to spot the bad customer reviews and customer churn because of poor customer experience. However the above mentioned hidden costs go completely unnoticed, which over a period of time could even kill the company. The best anti-gambit for such a situation is to work hard and fix the customer experience first. The rest will start falling in line within 90 days!

Vivek Jaiswal
I am the founder and CEO of Customer Guru, a boutique customer experience consultancy based in India. We are committed to building a happier customer base for our clients in all industry segments. I bring extensive industry experience in implementing NPS® in major global brands. I believe that the path to sustainable organic growth for any business is only by delivering exceptional customer experience.


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