What poor customer service really costs – billions: Editor’s Note

I realize in this era of recession it’s not always possible to fully staff a front counter.

I also realize fewer employees mean more work for those folks doing counter duty.

But when does being overworked cross the line with being helpful?

This was a question I asked myself last weekend, standing in line to return a box of cable-TV supplies to my service provider in Auburn.

When I finally did get to the counter, nearly 20 minutes later, the person with whom I was dealing didn’t have much to discuss, with the exception of a modem I’d forgotten.

“Your modem is missing,” she said.

Certain one of the gadgets in my bag was the modem (yes, we can’t all be computer-science majors) I told her I thought that’s what I’d brought.

“No, it’s not,” she said, noting that was the box for my cable TV.

“Do you have your modem?” she asked, clearly not understanding I had no idea what the modem looked like. (I’m still willing to swear on a stack of “Ishtar” videos that the device I handed her was my modem.)

“You need your modem,” she repeated. “Do you have it?”

That was it. No offer to explain what the thing looked like, no explanation of what would happen next (public beheading? jail time?); no query as to how she could help me further.

After a few more questions – from me, about whether I was going to be charged a ransom for the thing – I was walking out the door, frustrated, and wondering if I could Google a picture of the gadget, so that I could find it among the clutter of my moving boxes.

Welcome to the new millennium of customer service.

You’ve all been through this before, so my story probably isn’t all that exciting.

But what should be exciting – “exciting” as in the sense of getting jabbed with a pen knife – is just how much poor customer service is costing business these days. And if it’s costing business, that means there’s hope someone out there is listening.

A recent study of business practices in 16 countries put an actual price tag on losses due to bad customer service: a staggering $338.5 billion, with an average value of $289 (in the U.S.) for each “lost” relationship. The cost to the overall U.S. economy, from customers throwing up their hands and cutting their service provider off: $83 billion.

No small change, indeed.

Titled “The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement,” the study describes an especially woeful chunk of the pie: the cable and satellite TV industry as the biggest loser, with an astonishing loss of $37 billion.

The “losses” reflect either a transaction taken to a competitor, or services that customers completely dropped, no doubt after angrily stomping out the door or slamming down a phone.

Customers’ biggest gripes in the survey were (no surprise here): having to repeat themselves; being trapped in automated self-service; being forced to wait too long for service; representatives who don’t know their history and value; and not being able to switch between communication channels easily.

The study, generated by customer-service software company Genesys, with industry analysts Datamonitor/Ovum, put the matter succinctly.

“Poor customer service has a clear and immediate impact on a company,” the survey’s conclusion reads. “It is imperative that an enterprise engage consumers on the customer’s terms or risk losing them.”

Is someone with a briefcase and a suit taking notes here?

But there’s more at stake than just one bottom line.

What businesses also risk losing is their contribution to the vitality of the U.S. economy. Each customer they lose, due to endless phone waits or confused employees, cuts into a bottom line that in turn chips away at national financial robustness.

The sad thing, at least as far as a national bottom line goes, is when an incensed customer drops the service entirely, instead of seeking out a competitor company. That means money that doesn’t get plugged back into the industry. According to the study, more than 65 percent of customers have “ended relationships due to poor customer service.” And of that number, “39 percent of them are lost or abandoned completely as consumers decide not to purchase from anyone.”

This study should have served as a wakeup call to businesses. And no doubt, in some quarters it has.

But here’s how my customer experience went. A call to my cable company popped me into their automated phone system. Faced with a limited choice of options to dial, I picked the best option I could: technical assistance.

After a few minutes of sitting through an automated questioner asking me multiple times to be more specific, and another taped-in voice promising to give me “a great experience,” a human actually answered. She explained there was no way to call the specific store (although she would e-mail my concerns to the store manager.)

There also was no direct customer-concern line.

So I guess I should be happy a human being answered at all.

And I’ll take my best shot figuring out what the modem looks like.

To view a copy of this report, go online to: www.genesyslab.com/system/files/Genesys_US_Survey09_screen.pdf.