Poor Customer Service Is a Costly Business Mistake

Most everyone who owns a business knows how important referrals or word of mouth marketing is for the success of their business. Equally important is the absence of any negative word of mouth marketing from your customers about your business. Nothing will close down a business quicker than gaining a reputation for poor customer service. Think about how many times you have had a poor experience at a local restaurant and how many people you may have told about this experience. Have you ever been back to that Restaurant? Do you think the friends you’ve told ever go there? The answer to both is likely “No”. Is that restaurant still in business? Most of the restaurants where I’ve experienced poor service are no longer operating. The simple facts are if a business doesn’t focus on providing the best service to their customers they will quickly be out of business.

Word of bad service spreads quickly and not focusing on satisfying your current customers will prove to be a costly mistake. A study from the Verde Group and the Wharton School at the University of Pennsylvania revealed some startling statistics. First the study revealed that almost half of shoppers will avoid a particular store because of someone else’s negative experience. Also, 31% of customers will tell one or more friends about a poor experience and on average will tell four people.

In today’s internet crazed society four people can quickly turn into thousands of people if a customer decides to share their experience online through review sites or social networks such as Twitter or Facebook. And, when that negative experience is shared, you can certainly count on a bit of embellishment to make the experience sound a bit more terrible than the actual truth. The study further concluded that out of 100 dissatisfied customers a business stands to lose between 32 and 36 current or potential customers.

It is much cheaper to retain a current customer than it is to attract a new one. Businesses with a strategic focus on service stand to gain much more than a business focused on growth from creative marketing and slick ad campaigns. I would much rather visit our locally owned Roush’s hardware store than the major retail home improvement center nearby. Every time I visit Roush’s I can count on someone asking me if I need assistance finding something within 1-2 minutes of walking in the store. This is certainly not the case when I visit the major retailer. In fact, during my last visit to this store not one employee offered any assistance the entire time I spent in the store.

When I finally asked an employee for assistance in finding the item I needed, they simply told me the aisle and approximate location where I should look. Needless to say, I haven’t been back to that store. I’ll probably tell a few people along the way about my poor experience there and how Roush’s is always eager to assist their customers once they walk in the door. I may even post my poor experience online to share with the world. How many people will see this online is anyone’s guess but I’m thinking it will be more than just a few. Can you afford the possibility of having hundreds or perhaps thousands of people know your business doesn’t value it’s customers? A simple strategy that focuses on providing great customer service to your current customer base will go a long way towards marketing your business.