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The Cost of Poor Customer Service – Competitive Differentiation Via Excellence

Recently I was asked to make a presentation on service excellence as a competitive differentiator for a client. In the summer they had used PROBE for Service to assess the business and determine where/how to improve. They were so impressed with the PROBE results I was asked to create a presentation for their customers at a “Lunch & Learn” session. For those of you familiar with the Service tool you’ll remember we created this product as a follow on to PROBE for Manufacturing which was our first Best Practice Benchmarking tool created to assess world class competitiveness and a diagnostic for continuous improvement strategies. Extensive research was commissioned at the time to create the model behind the Service product. This culminated in a report titled “Service Competitiveness – An Anglo-US Study (see google related searches for this study here).

Why mention this now? In preparation for the presentation I pulled upon several pieces of data that came from that first study. The data, that we use in training, discusses the impact of poor customer service impact issues such as time to resolve a problem, how many people a customer has to deal with in resolving that problem, etc.). Yet this was data from the late 90’s and my concern was how the audience might view this information given the age of the research. While our PROBE for Service product is current and relevant for today’s issues was the data that formed the basis for it still relevant itself? Off to Google I went!

To my astonishment not only is the basic premise derived from the original research data still relevant it seems things might be worse. What I found was a particularly good piece of research by Genesys on “The Cost of Poor Customer Service” which is study of the issue in 16 economies. This extensive piece of research published in 2009 found that $338.5 billion (US) could be attributed in losses to poor customer service when measured across 16 economies. An average of $243 p/customer p/year is either lost to a competitor or simply abandoned. The #1 satisfier across all countries was competent people to assist in any channel.

You can find this research study online at: http://enterprise.alcatel-lucent.com/docs/?id=20346. In addition to a global view the research is also broken out for each of the 16 countries. If you’re interested in the presentation made or would like to contact me for more information you can reach me at neil.cambridge@comparisonna.com.

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Posted: Thursday, December 1st, 2011

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