A couple of weeks ago, we saw that walls between the front and back offices stop the flow of information about customer experiences. As well as preventing permanent fixes, this results in strange perceptions e.g. “everything is okay”; “if customer satisfaction was important it would be talked about”.
So here is a list post, 12 ways a poor customer experience can affect your bottom line (if you let it):
- 1. The customer won’t come back.
- Even if you give them a lovely free replacement, they are much less likely to buy from you again than a customer who had a great experience. See this post to bust a myth.
- 2. The customer will tell the world.
- Literally, the world. Then the world (and her brother) will use this information to choose your competitors.
- 3. You will spend more to get the same volume of sales.
- Advertising, PR manipulation of online reviews, reassuring B2B customers. Higher sales and marketing spends mean lower margins.
- 4. You will discount to get the same number of customers.
- And discounts mean lower revenues.
- 5. You pay for product returns.
- So you are a service provider and this one doesn’t apply to you, there are still 11 others.
- 6. Distributors, retailers, professional reviewers and B2B customers distance themselves from you.
- Losing your route to market, or even your market, is going to hit revenues and create new costs as you look for other marketplaces.
- 7. Your customer services team grows ever larger.
- More people, more space, more managers, more IT – the cost of extra customer services staff can spiral.
- 8. Lines of communication become fragile.
- Sales used to sit next to engineering, now customer services are in a different office, building, country, continent. They have no idea of what you do, who you are or how to feedback.
- 9. The issues seen by customers are reflected in internal waste.
- Many product quality issues are seen throughout the supply chain, increasing waste and costs at every point. And if your customers can’t order or don’t receive their goods, your people will often struggle to get it done.
- 10. Product and IT lifecycles are cut short.
- You decide to withdraw a failing product or upgrade IT before you finish paying for it.
- 11. Development costs skyrocket.
- The new product, process or system is rushed; overtime and extra staff push up costs.
- 12. You continue to build the same problems into new products and systems.
- If you don’t pay attention to your customers you won’t learn and the issues with your existing offer will be repeated in its replacement and the one after that…
Honestly, I don’t think the list stops at 12 – how does the experience of your customers impact your organisation?