Are businesses suffering because John Q. Public is pinching pennies and cutting luxuries? Maybe. A number of businesses who have not survived are those failing to place the full measure of importance on those still spending money. Customers are aware, now more than ever, the increasing value of their patronage.
Businesses are losing more money than what can be published in the quarterly or annual profit and loss analysis. While competing business spend thousands, sometimes millions on advertising, turning phrases, making their product or service superior in quality, more convenient, more affordable, they can be oblivious to what's costing them the most; their employees. Employers are not hemorrhaging money in wages or company property, but in the quality, or lack thereof, of the customer service being provided by its employees. The employees are not being held accountable for the mannerism in which they treat clientele.
In April of 2007, MSN published findings from an online survey, inviting people to share their customer service stories, issues and complaints. The published report listed the 10 worst companies from the result of the survey. The companies that rated at the very bottom in customer service polling included the following:
1. Sprint 40%
2. Bank of America 30%
3. Comcast 30%
4. Time Warner Cable 29%
5. AT&T 26%
6. Citibank 24%
7. Wal-Mart 23%
8. Verizon 22%
9. Wells Fargo 21%
10. DirectTV 20%
Bank of America has more than 20 Million account holders, and losing one, is not all that detrimental to the financial giant. But if 30% of those who had an opinion about Bank of America that represents 6 million account holders electing to deposit their funds elsewhere and that would be a significant loss for the bank. One ex-client of Bank of America publishing his experience with their customer service one ex-client stated; "The B of A has the worst customer service. So called the account managers can bang the phone on you without thinking twice. I called to request the interest rate review / reduction which started at 10.9% and was increased to 22% without my consent . The account manager told me to consider the home equity loan and talk to their mortgage department to pay off my loan. I consider it not solving the problem and trying to avoid the issue. "
Sprint and Verizon, both huge cellular phone service providers, would likewise suffer. 22% of Verizon's 60.7 million subscribers is 13,354,000. The average monthly cost for most cellular services is billed at $ 77 per month .. Verizon's customer service could be costing them $ 102,825,8,000 per month in early termination, and unrenewed contracts.
In this light, not even Wal-Mart is invincible. Even with 138 million shoppers per week 23% is 31,740,000 unsatisfied consumers, who on average spend approximately $ 200 per week. Should all 31,740,000 customers take their business elsewhere, Wal-Mart stands to lose $ 6,348,000,000 per week.
Art Waller, Regional Department Head for Utah State University points to recent findings that a typical business will only hear from 4% of its dissatisfied customers. 96% will say nothing and simply take their business elsewhere. Of this 96%, 68% perceive an attitude of indifference in the owner, manager or employee and will never reveal their dissatisfaction.
"A typical dissatisfied customer will tell eight to ten people about their problem. One in five will tell 20. It takes 12 positive service incidents to make up for one negative incident. Seven out of ten complaining customers will do business with you again if you resolve the complaint in their favor. If you resolve it on the spot, 95 percent will do business with you again. "
Companies renowned for their outstanding customer service, Amazon.com, USAA, Publix Super Markets, Zappos.com, Ace Hardware and Hewlett-Packard, have survived the recession, investing in cheap technology to improve service, holding their employees accountable. Call Recording, is one of the technological advances being utilized by employers not only as a valuable training tool, but as a means of following through with the expectations and customer service of their employees. Those businesses at the top of their game place value in the quality of their employees and customer service representatives, over quantity. The out-come of which is obvious in the loyalty of their customers, their referrals and their ability to survive.
There is not, and never will be a more effective marketing tool than a referral from a satisfied customer. With the rising cost of advertising, word of mouth advertising is an invaluable resource that no business can take for granted. Yet customer loyalty is in most cases worth 10 times the price of a single purchase. "