The Customer Experience Series: Why Does Good Customer Service Matter?

Over the years, I’ve met a number of department managers (even those making their living in the sales arena) that will openly question why the customer experience matters? Why, they’ll ask, do we need to focus so heavily on doing more than just delivering a good product at a good price? Why isn’t ‘good enough’ actually good enough?

Customer studies are clear: People are more likely to leave you for your competitor over a service issue than they are a price or product issue. In fact, a study by Bain & Company tells us they’re actually four times more likely.

Moreover, Bain & Company tells us that it costs businesses six to seven times more to acquire a new customer than it does to keep an existing one.

Customer service matters.

How would you like to reduce costs by 10% without harming you’re your current sales? Well, according to the book Leading on the Edge of Chaos, just a 2% increase in customer retention has the same effect as reducing cost by 10%. Let this sink in. As your business or your industry starts to hit a flat period (as automotive retail will in 2017), what if you’ve been successful at increasing customer retention by 2%? Your competitors will be forced to cut their expenses by 10% just to stay on a level play field with you.

Customer service matters.

But wait, won’t unhappy customers just tell us when they feel they’ve been wronged? When this happens, can’t we just correct everything then?

If only. According to the White House Office of Consumer Affairs, the average dissatisfied customer is going to tell nine to fifteen others about their experience; but only 1 out of 26 will ever complain to you. This means 96% of your unhappy customers won’t ever bother to tell you – but, they have no problem telling their friends and family. (Or, going online and telling the world how much they hate you.)

Customer service matters.

Of course, you already know that online reviews matter, right? Dimensional Research claims that 90% of people say online reviews influence their buying decisions. While a new survey from FindLaw shows that 87% of Americans trust online reviews to help them make local buying decisions. So we need happy customers, don’t we? Absolutely, but there is a little bit more.

Go Fish Digital found that just one negative review could equal a loss of 22% of potential customers. Three negative reviews and it’s a potential loss of 59% of potential customers, and four negative reviews and it’s a loss of 70% of potential customers.

Customer service matters.

Are your eyes rolling to the back of your head from all this data? How about a bit more?

Ninety percent of consumers will pay you more to ensure a good customer experience; and American Express tells us that 67% of consumers will pay 14% more for a great experience. Knowing this, you can actually do some math to determine just how much customer service matters to your business. Of course, only after we all agree that customer service matters.

We’ve learned that providing a good customer experience leads to customer retention, increased revenue and increased profits. Basically, good customer service costs you less and nets you more… so, let’s figure out how to wow them.

Next up in the series: The Customer Is Not Always Right.

About TheManager:

Steve Stauning, creator of The Appointment Culture and an expert in The Customer Experience. He is also an extremely popular keynote speaker, writer, and industry consultant. Learn more about Steve at