The multibillion dollar cost of poor customer service


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New research from leading cloud contact center vendor NewVoiceMedia reveals that US companies deemed to have poor customer service are losing a staggering $41 billion a year.

The survey revealed that 44 percent of US consumers are taking their business elsewhere as a result of inadequate service – and of those, 89 percent have switched at least once or twice in the last year. 53 percent are so put off from calling a business for fear of not being able to speak to a real person straight away, that they will switch to a competitor without even attempting to resolve a problem.

Top frustrations causing consumers to switch are lack of appreciation from a business (53%), unhelpful/rude contact center staff (42%), being passed around multiple agents (32%), agents lacking the knowledge required to answer a query (29%) and being kept on hold (25%).

With respondents spending an average of $392 before leaving, it is estimated that $41 billion is lost by US businesses each year – not including the significant cost of replacing lost customers and the impact of negative word of mouth. Faced with a poor experience, 58 percent of customers would never use that company again and half would tell friends and colleagues not to use the business. As further evidence that complaints can’t be kept quiet in the digital age, a third (34%) of consumers admit they would take their revenge online by posting a review or complaining via social media. Among the 25-34 year-olds, this figure soared to nearly 60 percent (59.3%).

The research indicated that 16-24 year-olds are the most tolerant when it comes to bad interactions, with 11 percent taking no action at all following a poor experience. But those that do are the most likely to turn to social media – arguably the most detrimental means of complaint. Acknowledging this, one respondent commented, “The risk of getting other people’s attention will cause the service providers to act quickly.”

Both genders remain fairly tolerant of hold times, but women more so than men – with 82 percent prepared to wait for more than five minutes, compared to 74 percent of men.

Voice is still the channel of choice for customers, with 59 percent preferring to contact a business by phone and 33 percent choosing to address an issue via email. While the majority of those surveyed prefer such traditional forms of communication, 27 percent of Generation Y chose social media as the most effective way to get a response.

The significance consumers place on excellent service presents opportunities as well as threats, as organisations can boost their business by getting it right. The research found that 70 percent of respondents said that good service had a considerable influence on their loyalty and 69 percent would recommend the company to others. Half would use the business more frequently and 42 percent are prepared to spend more money with them.

“With $41 billion of revenue being transferred between companies, this research reinforces just how much influence customers have on a business’s success”, comments Jonathan Gale, CEO of NewVoiceMedia. “Great customer service is the critical differentiator and investing in providing personalized and engaging customer experiences will help businesses succeed in retaining customers and securing new business.”

For further information, download the research report at

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