The Bad Customer Service Numbers Game

If you’re too busy welcoming new clients through the front door, and haven’t even noticed that some existing ones are slipping out the back; then definitely exceptional customer service skills will help you overcome this obstacle.

During business planning workshops I facilitate, I’ve always asked business owners if ever they’re too busy entertaining new or potential customers that they forget to provide exceptional service to retain existing clients. Quite a lot of them say ‘yes;’ and most of these business owners are also unable to identify who their most profitable clients are right away.

A leaky bucket is the best example for this situation. Let’s take two small business owners in the same industry. Let’s say both of them attract ten percent of new clients every year; which is not bad,  considering the business climate and the saturation of their industry.

Business Owner A is able to maintain ninety five percent of his customers, while the other five percent leave because of different reasons. Business Owner B , on the other hand, retains ninety percent of her clients, while the ten percent is lost due to fallouts.

These are very impressive figures, I might say; but after fourteen years in the business, Business Owner A was able to double his business size while Business Owner B stayed the same.

This is where the metaphor of the leaky bucket comes in. Business Owner B suffers from a ‘leaky bucket.’ It means that too many customers are slipping through the holes at the bottom. Most of her customers’ reason for fallout was her company’s poor customer service. What’s worse is that Business Owner B doesn’t even know it!

Research shows that a typical business doesn’t get feedback from about ninety-six percent of their unhappy customers. When it comes to ‘word of mouth,’  every customer complaint will reach twenty six other people with the same concern. What’s more is that these twenty six people will tell an average of nine to ten people each about how bad a company’s customer service is. Thirteen percent will tell more than twenty people about their horrendous experience.

This is how the numbers look like for businesses whose customer turnovers are due to poor customer service skills. Though the numbers might initially look good, there is always a bigger effect in the long run. But, it’s not all about bad news; because for every resolved complaint, customers tell five people about the experience, on the average. This is usually positive feedback.

Another example is that ninety five percent of complainers engage to do business with the company again compared to customers who don’t complain. This number now goes to the ninety-five percent customer retention if the complaint was dealt with quickly and efficiently.

Keeping your clients happy through exceptional customer service will plug the holes in your leaky bucket. Keeping your bucket leak-free will, of course, result to a more successful and sustainable business.

Leave a Reply