Customer service failures: Being proactive works

“S**t happens” is an often-heard derogatory human response applied when something goes wrong. Aside from the bad language, it implies a mindset of acceptance that things can go wrong and do go wrong. Worse still, it implies a blasé attitude that denotes an expectation of things going wrong again in future.

Customer service failures can be defined as ‘representing temporary or permanent interruptions of the customer’s regular service experience’. In service delivery terms, poor customer experience costs organisations money, time, energy, and even staff motivation.

The Cost of Poor Customer Service

A useful illustration of the cost of poor customer experience is seen by Genesys, a global company focussing upon customer service solutions. In 2009 they aimed to produce the first large-scale attempt to place an economic value on the lost revenue from customer service across all customer contact channels when consumer expectations were not met. Headline results included that in the UK 73% of consumers had ended a relationship due to poor service, and that enterprises in the UK lose £15.3 billion each year due to defections and abandoned purchases as a direct result of a poor experience. Genesys concluded that poor customer service has “a clear and immediate impact on a company”.

More recently, an American study from 2018 suggested poor customer service is costing businesses more than $75 billion each year, increasing by $13 billion since 2016. Similar high figures in the billions are also often cited for Asian and Australian companies. Either way, costly service failure can be seen to be a global phenomenon which brings overtly negative impacts.

Correcting Customer Service Mistakes

Putting services failures right quickly can help reduce the likelihood of the failure turning into a complaint and may even lead to situations known as the service recovery paradox. This is where a customer regards a company more highly after they’ve corrected a service failure compared to how they would have perceived the company had the problem never occurred in the first place.

Customer surveys can help you identify areas where you need to improve.

For instance, in an online survey context, email alerts can be sent to multiple staff if a customer provides low customer satisfaction scores. Another example might be sending an email alert to cleaners when people are not satisfied with the cleanliness of a restaurant.

Winning The Customer Back

To help reduce service failures, here’s three top tips for successful service recovery:

1)    Adopt Service Recovery Techniques: Sounds obvious, but not all organisations do this. Build service recovery techniques into your everyday service delivery to reduce the impact of service failure and increase customer satisfaction. For instance, use Snap Surveys’ email alert system to become quickly aware of potential issues as they arise in real time.

2)    Be a Learning Organisation: Service recovery begins with listening and understanding, and ends with acting. Learn from issues arising and make changes accordingly to reduce the likelihood of it happening again.

3)    Be Transparent: With many customers increasingly raising complaints online through social media, and with those comments being visible to the masses, organisations need to be quick to respond to service failures proactively and decisively. Done well, this can signal quality and trust, and ultimately strengthen a brand.

Conclusion

The importance of customer service has grown immeasurably since the advent of the internet, social media and review websites.

Most consumers research a company online before buying, so if you aren’t looking after your customer, it’s likely other people will be aware of this.

You won’t always get it right first time – but making sure every customer is satisfied in the end is vital to your business.

Dr Simon Williams is the Managing Director of Service Insights Ltd, a market research and management consultancy providing research, training and consultancy services. See www.serviceinsights.co.uk or contact 07740 854172 for further information.

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