Poor service costs firms $338.5 billion yearly

24 Nov 2009

A survey of consumers in 16 major industrialized economies found that poor customer service results in losses of $338.5 billion per year when customers defect and abandon their purchases.

The poll also found that transactions taken to a competitor represented 63% of total losses while the rest were incurred due to transactions abandoned entirely.

The hardest hit industries are financial services, cable and satellite TV providers, and a variety of telecommunications companies.

In the past year financial services firms saw more than $44 billion in lost revenue while cable and satellite TV providers suffered more than $37 billion of losses. Wireless network providers and internet service providers each had $36 billion in lost revenue, while landline service providers also lost $33 billion.

Each lost relationship across the 16 countries surveyed is valued at an average of $243 per year.

Covered in the survey were consumers from Australia, Brazil, Canada, China, Czech Republic, France, Germany, India, Italy, Mexico, The Netherlands, New Zealand, Poland, Russia, UK and US.

The study, sponsored by Genesys Telecommunications Laboratories and titled “The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement,” included a total of 8,880 respondents or at least 500 from each country.

Respondents said the most significant root causes of poor service are being trapped in automated self-service, being forced to wait too long for service, having to repeat themselves, and representatives that lack the skills to answer questions.

The most requested improvements in all countries were to be able to start in voice self-service or the web and get live assistance from an agent, and to start in e-mail and have better integration with agent-assisted service.

When asked what they would most like to see companies deploy to improve service, 40% chose human service, but more than half of consumers chose at least one new communication channel among their top choices.

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