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The High Cost of Lousy Customer Service

By shipa 16 May, 2019

Companies are losing billions because of lousy customer service. As noted by Forbes, bad service costs organizations more than $75 billion every year — up $13 billion from 2016 — creating a retail environment where 67 percent of customers are now “serial switchers,” willing to shift brand allegiance if businesses can’t deliver top-tier customer service. 

The hard truth: Money is just the start — lousy service can also cause a chain reaction of public complaints and reputation damage resulting in further revenue losses. How do brands up their game and deliver on service solutions?

Market Forces

Customer service expectations are changing. As noted by Campaign, 40 percent of consumers switched because they found providers with better reputations for customer service. Forty-six percent said they were willing to pay more for better service, and 55 percent based brand recommendations on customer service rather than product or price.

The Campaign article highlights an extreme example of this new market concept: A young soldier called customer support for his military-issued rifle — during a firefight. Not only was he able to reach someone immediately, but the customer service rep diagnosed the problem and suggested a fix in less than a minute.

Obviously, this is an unusual situation. Most customers won’t find themselves calling help lines when it’s a matter of life or death. For companies, however, it is — above-average service keeps their business on the right side of consumer opinion and gives them another opportunity to expand their market impact. 

Mobile-driven, tech-savvy customers are no longer satisfied with hour-long call center wait times or days-long email response windows. If they have a problem they want it solved now, or they’re happy to speak out on social media if it isn’t fixed. It’s a metric that’s difficult to measure and correct. Disgruntled customers who won’t take their frustrations through typical service channels — since that’s where companies dropped the ball — will gladly tell the world exactly how companies let them down.

Common Errors

So what’s the disconnect? Why are brands still making the same mistakes even as customer service becomes a top-tier priority in attracting and retaining customers? 

In many cases, it comes down to one (or more) of three broad errors that frustrate potential buyers:

 

  • Minimizing the Impact: For brands doing billions in business every year across the globe, it’s easy to see the problem of one consumer as an acceptable loss. The problem? Voices carry and amplify quickly if consumers find the right platform. Consider the case of PC manufacturer Dell. As noted by Inc., a monumentally poor customer service interaction led one customer to start a blog about his experience, which quickly drew other consumers with similar experiences and eventually generated news coverage, forcing a total redesign of the Dell customer service model.
  • Going on the Offensive: Brands aren’t always treated fairly. Some issues are beyond their control, while others are outside their area of expertise. This can result in companies going on the offensive when consumers are unreasonable. Unfortunately, being right often carries little weight among consumers. 
  • Missing Compassion: Perennial newsmaker United Airlines – plagued by high-profile service-related controversies — learned that a lack of compassion for traveler’s lost belongings led to viral music videos, public scrutiny and falling stock prices. Here, it’s a question of drafting policy matched by corporate resources, allowing front-line staff to effectively meet customer needs.

 

The MENA Challenge

The Middle East region represents massive opportunity — Gartner predicts $155 billion in IT spending through 2018 — but comes with unique customer service challenges. 

As noted by GSMA, there are now more than 365 million mobile subscribers across the Middle East, making cloud-driven call centers and social-driven customer response teams a necessity. Conceptually, this is similar to American market expectations, but brands operating in the Middle East must also address the need for multi-language support. Informed by rising cross-border e-commerce revenues, companies must be able to reliably connect callers with local-language speakers to answer their questions and address any concerns.

This leads into the largest customer service concern for Middle East retailers: logistics. As noted by Gulf Business, MENA users “always voice their frustration about delivery delays and lack of transparency in lead times.”  Add in the lack of existing postal systems and city maps, combine with the 38 percent of transport industry costs spent on “unofficial levies” to reduce clearing times, and it’s clear that if companies want to excel in customer service across the Middle East, better logistics are key.

From Lousy to Laudatory

Here’s the bottom line for brands looking to boost business in the Middle East: Lousy customer service hurts business and can cripple market impact. But the complexity and cost of MENA logistics makes it easy for companies to miss the mark by minimizing the impact of delayed shipments, placing blame on border agencies or lacking compassion for user needs.

In a mobile-driven region that’s rapidly ramping up cross-border e-commerce spending, best-of-breed logistics partnerships are now must-haves for brands to make the shift from lousy to laudatory and boost their MENA market value.

 

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