How Much Does Bad Customer Service Cost?

Working for decades as an industry consultant, I’ve navigated the consolidation of numerous industry associations, including GATF, PIA, NAPL, MFSA, AMSP, and more.  One key lesson emerged: Regardless of the products or services you offer, be it prepress, wide format, print, or mail, the fundamental rule of business success remains – listening and responding to your customers is essential.  Neglecting this principle can be costly.

Recognizing this pivotal fact, I recently dusted off a presentation that had been shelved for a while.  I was thrilled by the positive response it received.  The presentation focused on the significant impact of poor customer service, underscoring the necessity for businesses to comprehend the costs it incurs.

The primary aim of the presentation was to motivate individuals within organizations to utilize various tools such as focus groups, direct customer meetings, and surveys.  These methods serve as an early warning system against customer attrition, aiming to identify and rectify dissatisfaction before customers look elsewhere.  By proactively engaging customers and heeding their feedback, companies can pinpoint issues, correct deficiencies, and elevate overall customer satisfaction.

The presentation stressed the importance of integrating customer voices into day-to-day activities.  This approach aligns business strategies with customer needs, enhancing loyalty and business growth.  The slide on the cost of poor customer service sparked audience interest, leading to a poll with questions such as:

  • What is the cost of attracting a new customer vs. retaining an old one?
  • What’s the percentage of customers returning if issues are resolved promptly? What’s the percentage of silent, unsatisfied customers?
  • How long does an unhappy customer remembers an issue?

What is the ratio of unvoiced complaints to expressed ones?

The surprising answers revealed:

  • Attracting a new customer costs six times more.
  • 95% of customers with immediately resolved issues continue ordering; 97% of unhappy customers do not voice their displeasure.
  • Unhappy customers remember their negative experiences for 23 years on average.
  • For every complaint, up to 25 other customers may have the same grievance.

These statistics underscore the significant and perhaps long-lasting impact of negative customer experiences – and the potential implications.  It is crucial to consider the potential attrition and cost implications of such a result.  A negative experience can result in the loss of not only a particular customer but potentially others for years to come.

However, companies that actively monitor and address customer satisfaction can prevent customer churn and maintain loyalty.  The presentation emphasized the significance of incorporating the voice of the customer into day-to-day operations.  Doing so provides an opportunity to resolve issues promptly, thus preventing customer churn and maintaining customer loyalty.

This customer-centric approach ensures that organizations remain attuned to evolving market dynamics and can adapt their offerings accordingly.  By valuing customer insights and aligning business strategies with their needs and preferences, companies can make informed decisions that foster customer loyalty and drive growth.

This article was produced by industry consultant, Howie Fenton.  With over 30 years of experience, he’s established himself as a leading advisor, author, and trainer in the graphic arts industry.  His subject matter expertise lies in benchmarking operational and financial performance, which is underpinned by both practical experience and extensive market research. Fenton has worked with leading organizations such as GATF, PIA, NAPL, and Keypoint Intelligence.  Today, he heads his own company, applying his understanding of process improvement and best practices to provide training and consulting.  For more information, visit or email him.

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