Cause and effect

It seems obvious, given what we’ve discussed on this blog before, but customer service really does impact customer retention. A new study from the United Kingdom shows that telecom companies there have lost customers as result of poor customer service.

The article in TMC.net says that the study, entitled The Cost of Poor Customer Service: The Economic Impact of the Customer Experience (conducted by Genesys Telecommunication Laboratory)  found that ” roughly 73 percent of customers ended a relationship in the United Kingdom due to a poor customer service experience.” Additionally:

The study reported that the average value of each lost relationship is £248, or about $394, per year, for a total of £15.3 billion, or $24.3 billion, a major figure in today’s unstable economic times.

Clearly, there is a bottom line component to good customer service: it helps to stave loss. It also is good to keep in mind that each customer that is lost due to bad customer service carries an impact beyond his/her business: the business of people he/she knows and advices.  Bad word of mouth can also damage a business.

Thoughts?

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