Tag Archive for 'bad customer service'

Retail Make Up Sex

Did that subject line get you? I thought it would :-P The customer is mad. You didn’t do what she wanted, maybe you weren’t friendly enough, maybe you didn’t know enough about the product. Whatever the problem, you have to fix it, the consequences for not doing so are severe. Even if she’s mad, you’re going to want to keep her as a customer. It costs five to six times as much to get a new (first time) customer as it does to keep a current one. [1]

Furthermore, long term customers are usually more profitable.  A 5% increase in customers retention can boost profit by 25% to 125% [2] You also run the risk of her leaving and telling other people and losing potential customers because of her bad experience. Clearly you have to keep her from leaving angry, but how?

Play Nice

Customers were asked what single factor best defines high-quality service. The most frequent response was personal attention. [3] You have to let the customer know that you are concerned that they are upset. Tell them that you will personally do everything that you can to fix the situation. Make them feel like you are on their side.

Be friendly from your first interaction, whether or not the customer is complaining, an aura of kindness goes far in any industry. There are certain customers that will make it hard to be nice. You have to try to maintain your cool, no matter what the customer does or says, you have to respond politely. Her reaction will escalate if you respond in anger, whereas overreaching politeness has the power to diffuse the whole situation.

Give It Away

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Bad Customer Service Made Worse With Herding

One of the worst things about bad customer service is the fact that 96 percent of the time the customer will not file a complaint. At face value this does not seem like a bad thing, less complaints means less for service representatives to deal with. Ninety-one percent of those who don’t complain won’t come back. [i] It seems that they just quietly decide to patronize another company. Unfortunately, it is not that easy, the slighted customers are still complaining, they’re just complaining to other customers and prospects.

From previous blog posts, you know that (1) for every poorly served client, you’re handing him/her over to a competitor and (2) the costs of bad customer service can be astronomical.

How ‘herding’ makes a bad situation worse

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The Costs Of Bad Customer Service

In a previous blog post with the provocative title how to grow your competitor’s retail business and run yours into the ground, I was pretty graphic about the costs of bad customer service. That being said, I thought it worthwhile to do a few more calculations to really hammer home the costs:

The Costs Of Bad Customer Service

Example #1: One sale of $100 with $20 of revenue per month:

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