The High Cost of Poor Customer Service

These days, every company claims it places a premium on customer service. Unfortunately, the facts speak otherwise.

A just-released study conducted by cloud communications provider Corvisa offers insights into the disastrous state of customer support. The company surveyed more than 1,300 consumers and found that a whopping 48 percent have stopped doing business with a company due to negative customer service experiences in the past year. Even more frightening is the finding that nearly one-quarter of Millennials said they would stop doing business with a company after just one negative interaction.

Long hold times, agents that sound as if they are simply reading scripts and lack of proactivity are just a few of the problems the report identified. Despite the growing influence of the Internet and mobile apps, 41 percent of consumers indicate that they prefer a phone call for customer service. The number rises to 56 percent if they feel frustrated by an event.

Frankly, I’m surprised the numbers aren’t higher. In the last week alone, here’s a glance at what I’ve encountered:

*After initially receiving excellent support from a customer rep at Logitech, I saw a series of customer support emails arrive in Finnish. Never mind that I initially spoke with a customer service rep in English and provided a U.S. address for a replacement device.

*My ISP,, banished me into a black hole of technical support where it appears no one answers the phone or provides an update. After 45 minutes I hung up.

*I called Wells Fargo bank about potential identity theft and spent 15 minutes discussing the issue with a customer service rep. She placed me on hold to check on something but I was dumped back into the queue. A few minutes later, a different representative who had no idea what we had previously discussed answered the phone.

These problems also undermine businesses. For instance, a study conducted by ClickSoftware in 2014 found that customer service wait times cost U.S. businesses $130 billion annually.

There’s no question that customer service is a huge challenge, especially with all of today’s channels and devices. But CIOs must grab the reins and ensure that technologies deployed by an organization—and individual departments—actually work as billed and address customer requirements.

Businesses must also reframe their thinking about customer service: Corvisa found that 43 percent of companies rarely or never proactively reach out to customers, even though 80 percent of consumers say they would be impressed if a company did so in a way that’s helpful and not just promotional.

Samuel Greengard
Samuel Greengard
Samuel Greengard writes about business, technology and other topics. His book, The Internet of Things (MIT Press) was released in the spring of 2015.

Latest Articles