Bad customer service? It's a lot smarter to treat customers right

Is the customer always right? OK, they're not always right. But shouldn't consumers at least feel as though they are valued? Particularly in today's economy, where customer retention and growth is tougher and tougher, you would think the low-cost investment of being responsive to customers would be a wise move.

But more and more consumers are writing in with tales of woe that turned them sour on a company when quick action could have made the whole situation go away or even enhance positive feelings toward the business.Comedian Alonzo Bodden, a winner of Last Comic Standing, wasn't laughing when he was told that although he had paid for a business class ticket he was being downgraded to coach. So, he refused to be seated, waited until everyone boarded and was willing to wait for another flight until he finally won the tense standoff.

Even though the airline ultimately relented, Bodden was left with a sour feeling -- that the well over 100,000 miles he had flown with that airlines didn't really mean all that much.

"The corporate culture is 'screw the customer,' " he said. "That's how it feels."

Bodden said he has concluded companies would rather wear down a customer and test their resolve than exert a little more energy on providing a pleasant experience.

Frustrated consumers by the thousands spout off on social networking sites or post their woes on complaint boards. Still more, if there's money at stake, lodge complaints with the Better Business Bureau. The BBB fielded a 7% increase in complaints between 2007 and 2008.

"Too many companies have their eye on the short-term bottom line and they're sacrificing tremendous amounts of goodwill by becoming more 'efficient,' " said Professor Michael Solomon, director of the Center for Consumer Research at St. Joseph's University in Philadelphia. "I believe this is a true source of competitive advantage for companies that choose to stand out by showing they care about their customers -- and this is exacerbated in a deep recession where consumers shed their brand "acquaintances" and rememberwho their true "friends" are."

Solomon reminds businesses of an old adage: "It's far more profitable to retain a current customers than to add new ones."

John Daly, a management professor at the University of Texas at Austin, said businesses have a lot to gain -- or lose -- based on how they treat their customers.

"Many customer problems could easily be resolved if anyone (manager or otherwise) simply stepped up and took care of it immediately," he said.

It is counterproductive, Daly said, to give people the runaround.

"Actually, when you think of the cost of the runaround it would often be cheaper just to handle the problem quickly at the first point of contact," he said. "There is no doubt that great service translates into profits. There are many studies that demonstrate that."

The Wharton School of Business at the University of Pennsylvania did a study that showed the opposite can be true: bad service can have a profoundly negative impact. The study found that only 6% of those who had a problem dealing with a retailer reported the problem to the company, but 31% told other people. The study determined that for every 100 people who have a bad experience 32-36 customers would be lost.

Nearly half of shoppers, the study found, would avoid a particular store because someone else had a bad experience. Word of mouth depictions of a negative experience can be particularly bad for business, a consultant who ran the study said, because the over time the tales become exaggerated."Storytelling hurts retailers and entertains consumers."

Have you been rubbed the wrong way by an unapologetic business? Or would you like to give a pat on the back to someone who went above and beyond? Please comment and let us know.

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