If I asked you, you would probably say your business provides great customer service, maybe even superior service! But if surveyed, what would your customers say? You might be surprised at their responses. Statistics indicate most people feel customer service is lacking and that businesses are not as focused on customer service as they should be. Following are some of those statistics and they should make you reexamine your current service process.
What is Customer Service?
Customer service is the assistance and guidance a consumer receives from the representative of a business that sells a product or offers a service. The representative helps guide the customer through the sales process by answering questions, resolving problems, and creating a positive buying experience for the customer whether by phone, in person, or online via website or email.
30 Statistics You Should Know
You may believe your company has customer service down to a science but read the following statistics and ask yourself the question again. Perhaps you need a reality check or you’ll discover some fatal errors you’re making. There is always room for improvement and you’ll learn some positive ways to improve your customers’ experience.
Customer Service – Reality Checks
Do you have an accurate picture of how customers and prospects see your business? The following statistics illuminate some discrepancies between perceptions and reality.
- 80% of companies claim their customer service ranks “superior,” but in reality only 8% of their customers agree. (Source: Lee Resources on helpscout.net)
Time for a reality check! Apparently, there’s a strong trend among businesses to think more highly of their customer interactions than they should – because only a small percentage of customers appear to be satisfied. Are you making unrealistic assumptions about your customers’ opinions of your business and the quality of their experiences? Perhaps you should consider some more stringent analytical metrics so you can discover the areas where your business falls short and thus be able make the corrections needed to reverse this disturbing statistic.
- Only 4% of unhappy customers make their dissatisfaction known to the average business. (Source: “Understanding Customers” by Ruby Newell-Legner on helpscout.net)
This statistic means if you have 100 customers who aren’t happy, only four of them will bother to tell you. What about the other 96%?
- 96% of unhappy customers don’t make their complaints known to the business. (Source: Client Heartbeat Blog, clientheartbeat.com)
Those 96 out of 100 will just walk away. They won’t tell you what they didn’t like. They’ll just go – but they’ll tell other people why!
- Unhappy patrons will complain to as many as 9 to 15 people about their unsatisfactory experiences. Approximately 13% of unhappy customers tell more than 20 people about it! Meanwhile, satisfied customers who get their issues resolved will only share their experience with 4 to 6 others. (Source: Client Heartbeat Blog, clientheartbeat.com)
Negative information travels faster and farther than a positive experience. It’s not enough for your business to satisfy customers. You must ensure that the ones who are dissatisfied get their issues resolved. You may boast 50 glowing testimonials but one scathing review is what will naturally stick in new prospect’s minds.
- You’ll spend 6 to 7 times more trying to get a new customer than you expend to retain an existing customer. (Source: White House Office of Consumer Affairs on helpscout.net)
Winning over a new customer is not always an immediate response. You may have to contact new prospects many times in different ways before you finally win any of them over. And all those contacts cost money, as this next statistic shows:
- For every customer who abandons your business or turns to your competition, you lose $289 per year. (Source: Genesys)
That’s the prorated amount of all of the money your business spends on marketing, promotions, special gifts, coupons, discounts, returns, phone calls, and other interactions with your customers – money lost when they walk away. Your task should be to actively strive never to lose a customer because financial losses add up quickly.
Customer Service – Fatal Errors
Some mistakes businesses make with customers have terminal consequences.
- Bad customer service is behind 78% of abandoned transactions and failures to purchase. (Source: Shep Hyken, Customer Service Expert, Best Selling Business Writer for New York Times and Wall Street Journal)
- Customers prefer to speak to a live person. In the last year, 67% of customers were frustrated by inability to speak with a service representative and hung up with their issues unresolved. (Source: American Express Survey 2011 on helpscout.net)
Your automated answering system is fast and convenient for obtaining basic account information, but when it comes to resolving problems, you should have live interaction options available to address your customers’ concerns. When they’re angry or frustrated, your customers shouldn’t have to deal with the aggravation of trying to explain their problem to voice recognition software!
- If customers are unhappy, 91% of them will be unwilling to give you their business again. (Source: Lee Resources on helpscout.net)
Unless you work to reverse this statistic, you will lose a huge percentage of your customers every time you have an unresolved issue.
- Price-related problems and issues with products are less critical for customers than service issues, which are 4 times more likely to drive customers away to competitors. (Source: Client Heartbeat Blog, clientheartbeat.com)
Customer Service – Room for Improvement
Following are some statistics you can – and should – fix to build a strong customer base.
- 60% believe that striving for great customer service is not a focused priority and 26% of those actually think companies are downplaying attention service. (Source: Shep Hyken)
There is always room for improvement in any organization, some process or product that can be made better, and customer service is an excellent place to start.
- If it means an improved customer experience, 59% of your customers will give another company their business. (Source: Shep Hyken)
People like to be treated well, treated like they matter and their needs are important. If your competitors are doing a better job of conveying that message, your customer base will gradually migrate away from you.
- 41% of consumers expect the business to get back to them within six hours but only 36% of U.S. companies reply that quickly and 14% of businesses never answer the emails they receive from customers. (Source: helpscout.net on Desk.com)
- Customer service via email is offered by 94% of all online retailers but inquiries are responded to incorrectly at a rate of 27%. (Source: Zak Stambor, Internet Retailer 2010 on helpscout.net)
We have all experienced email replies that frustrate more than they fix. Responsiveness that is timely and effective is key for maintaining your customer base. But perhaps it’s not just using email that’s a problem …
- Consumers say customer service agents do not resolve their issues 50% of the time. (Source: Harris Interactive on helpscout.net)
Perhaps customer service agents, in general, lack training. How effective is your training program?
- For every customer who voices a complaint there are 26 other dissatisfied customers who have opted for silence. (Source: Client Heartbeat Blog, clientheartbeat.com)
But that silence can be deadly. As we’ve already seen, they may not tell you they’re disappointed or angry, but they’ll certainly tell others.
- In 2014, 51% of businesses are strategizing to improve team performance on customer experience. (Source: Temkin Group)
You can begin doing the same by first letting your customers know how much you value their business and appreciate their loyalty and then build up their experience from there.
- Customers feel they receive the best service from retail businesses and the worst service from health plan providers and television service companies. (Source: Bruce Temkin, Temkin Experience Ratings, 2011)
How ironic that two top trending issues, health care management and entertainment technology, appear to be the areas where service is least appealing to customers.
- It will take 12 positive experiences to negate a poor customer experience. (Source: Client Heartbeat Blog, clientheartbeat.com)
Further evidence that negativity is difficult and costly to overcome. Strive to ensure the quality of every customer experience!
Customer Service – Proof Positive
The stats that follow demonstrate customer service methodologies most likely to succeed.
- If they are convinced the service will be great, 70% of Americans will spend about 13% more with those companies. (Source: Shep Hyken)
Focus on building a reputation for customer service excellence is paramount to capturing a bigger share of your market.
- Closing a sale to a new customer is challenging: You will be successful at a rate of 5 to 20%. Your closing rate increases for your current customers to between 60% and 70%. (Source: Marketing Metrics on Helpscout.net)
This indicates the importance of building a loyal following that you can count on for repeat business.
- 55% of surveyed customers are willing to pay a higher price for products or services if the customer experience is excellent. (Source: DeFaqto Research)
- 80% of Americans say small businesses do a better job of providing great customer service than large companies. (Source: American Express Survey 2011 on helpscout.net)
- The formula for a satisfied customer experience is 78% quality service representatives and 38% personalization. (Source: The Cost of Poor Customer Service by Genesys Global Survey 2009 on helpscout.net)
This indicates consumers prefer working with service providers who really know what they’re doing over individualized features.
- The value of a loyal customer is about 10 times the cost of their original purchase. (Source: White House Office of Consumer Affairs on helpscout.net)
A win-win business strategy capitalizes on existing clientele, building customer value while building revenue.
- Decreasing your customer attrition rate by 2% decreases costs by 10%. (Source: Client Heartbeat Blog, clientheartbeat.com)
Keeping your customers happy will save you money!
- Reducing customer attrition by 5% can increase business profitability from 25 to 125%. (Source: “Leading on the Edge of Chaos,” Emmet Murphy and Mark Murphy)
- An important part of quality customer service is fast resolution of issues, according to 82% of consumers. (Source: LivePerson)
- “63% of companies expect to spend significantly more on customer experience in 2014 than they did in 2013, which is up from 54% in 2012 and 46% in 2011.” (Source: Temkin Group)
- 68% of businesses are making this their target year for investing in customer service management. (Source: 2014 Call Center Executive Priorities Report)
Businesses are realizing that building revenues is not just a matter of sales – revenue is greatly impacted by the power of a positive customer experience.
These important and compelling statistics demonstrate the power of your customer base to build and support your reputation in the industry. Never allow yourself to believe that just because you’re not hearing complaints, everything is fine. If your customers have a negative experience, they likely won’t tell you, but they’ll tell a lot of other people. Join this year’s trend toward improving your service representative team performance to create great experiences for your customers.