Bad Customer Service Will Kill You

86% of customers stop doing business with a company because of bad customer service.

During the holiday season, did you have an infuriating experience with a customer service representative?

Unfortunately, because of the current state of customer service, this question sounds absurd; of course you did!

My message to all business owners, CEOs and VPs of Customer Service: If you don't already have the right hiring practices or enough capital to get highly talented customer service agents, then get close to and develop your poor customer service managers, employees and agents quickly, or fire them immediately. Why? Because your company will slowly die by losing its most valuable assets: its customers.

Circuit City got larger and more impersonal after building itself into 1520 stores in the U.S. and Canada and 46,000 workers in the 90's. Competitors popped up, such as Best Buy and Costco. Then Circuit City lost its way taking too many wrong turns impacting both customers and employees and quickly became characterized by customers as impersonal, large and unfriendly. Several of their wrong turns included stopping the sales of popular appliances, letting go of high potential talent after the CarMax spin off; becoming reactive to competitor innovations; rapid construction/expansion into high crime areas to increase its valuation; stopping commissions to its salesforce, firing 3,400 salespeople; loosing its top senior executive talent; going to commercial credit during a dried up market; and then eventually going Chapter 11.

All of the poor decisions of Circuit City came down to one principle:

If you are a servant leader to customers and do all you can to ensure customers get the best possible experience, you will always win. If you were to go back and change all of the decisions above to a more customer-centric decision, the outcome would have been drastically different.

On average, customers tell 9 people about good experiences and 16 about bad experiences.
It is 6-7 times more expensive to acquire a new customer than to retain an existing one.

For the New Year: think about all that you have to lose; Start with Customer Service.

Most companies that track their customer service calls and interactions have a flawed system. They only analyze the customer interactions of high performing customer service agents rather than outsourced employees overseas or lower performing, lower paid agents. This seems to make sense economically. In order to keep costs low, you cannot uncover areas of necessary investment. Actually this is exactly the wrong economic decision. If you were to increase leadership development and assessment of your bottom performing customer service representatives (20th percentile and below) by 15%, you will effectively retain 20% more of your customer base, allowing you to spend less on acquiring new customers. Moreover, try tying an incentive system into your customer service assessment and strategy. Ultimately, you will not just save money, you will retain customers and instill a multiplier effect to recruit new customers and perhaps most importantly for you, keep and succeed in your job!

Among the companies that customer service and bad reviews are killing are consultants, online businesses, retail, transportation, telecommunications, cable providers, hotels and hospitality, SEO marketing providers, and marketing and sales representatives. Social media has illuminated poor customer service through negative reviews on such sites as Yelp, TripAdvisor, Better Business Bureau, Ripoff Report, and several others.

Consider the following bad review on a social media site.

"I called XYZ company to report a rude interaction I had with the installation representative at my home; and was asked to be put on hold for a moment. I politely said, "yes, I will hold." About 5 minutes later, the CSR (customer service representative) came back and asked me five questions about my account before identifying me. I noticed some typing in the background. I asked, "are you typing about my account? It sure sounds loud," to which the CSR replied, "oh, I am sorry, I was working on another account at the same time. I will stop now." I went on to calmly and politely explain that I really believe that after the representative was so rude and challenging to me at my home, that I would like to stop my contract with them. They entered my home without knocking, and was difficult the entire time. I said, "this just isn't working out." To which she replied, "You are locked into a contract." We will not allow you to leave the contract until the end of its duration." I asked to speak to the manager and the CSR placed me on hold for over 15 minutes. I again waited patiently until the manager came back on. I eventually got very angry and expressed my distaste. They hung up on me eventually."

To which the company responded on the social media site:

"This customer was irate and expected too much from us. We believe it was just best to hang up on them because they were so rude. We do not want to work with customers like this."

How do you think this made the company look in the eyes of other customers reading that review? Something tells me they won't be responding with a resounding, "Wow they really handled that well. I want to be one of their 'good' customers."

If you want to keep close and retain your customers, have consistent requests for feedback and advice and most importantly, be willing to change!

Here are a few tips for excellence in customer service as well as success in any job serving others:

  1. Know your boss. Your customer is your boss. Be sure to get to know who they are, their motivations, what they care about, and if possible their families and hobbies. On another but related note, you have another boss of course. Be sure to know her/him, and remember that you provide customer service to her/him as well!
  2. Help customers understand your systems and processes. You may know what you need to complete a request, however don't assume your customer understands. They may wonder why you are asking so many questions. Explain what is leading you to ask specific questions and how it will help you help them with their request.
  3. Say yes whenever possible. Figure out the logistics and possibilities later- it's important first for the customer to know you care about helping them.
  4. Exceed their expectations. If a customer is able to choose between you and others, be sure that you give them a reason to stay with you. What can you do to ensure you are better than the competition?
  5. Focus on the customer alone. Eliminate all external distractions. Multi-tasking is absolutely not allowed. The customer should feel like she/he is the only person that matters at that moment and you will do everything possible to focus on that person and make them feel like the most important person in the world.
  6. When asking questions, really listen for the answers. Don't just mirror it back for the sake of mirroring, but really hear what someone is saying in a way that enables you to empathize and communicate in a more meaningful and connected manner.
  7. Ask for consistent feedback in all that you do; request it in the form of appreciation, rating in some form, advice, and understanding of a result you achieved.
  8. Keep your cool. As Robert Frost said, "Education is the ability to listen to almost anything without losing your temper or your self-confidence."
  9. Be appreciative and grateful. "Be grateful for what you have and stop complaining - it bores everybody else, does you no good, and doesn't solve any problems." - Zig Ziglar
  10. Acknowledge Your Mistakes and Change.
  11. Remember that you provide customer service to your bosses and coworkers, too. They are just as much your customer as those who you serve externally. Knowing this will help you build your team and become a better company.
It takes many good deeds to build a good reputation, and only one bad one to lose it. - Benjamin Franklin

What advice do you have for yourself and others for the new year? How can we improve the downward death spiral of poor customer service?

We developed an online 360-degree SaaS assessment tool that helps employees to get consistent feedback, based on the messages in this article. See the video online at: If you are interested in a demo contact us using this form or become a member of Best Practice Institute, our association for executives, consultants, and thought leaders at all levels to pioneer and share best and innovative practices in leadership and management.