How Many Customers Can You Afford to Lose?
In 2018, I wrote an article on how service recovery would be an essential skill in two years. Well, two years have passed, and the Covid pandemic has brought the prediction to far more of a reality than anyone could have imagined. 2020 has created a perfect storm for massive customer defections. Should you worry? In a word – yes. The impact can be devastating.
The cost of a single lost customer will blow you away
The reason that service recovery skills are now even more important becomes incredibly obvious when you examine the cost of one, single. lost customer to your organization.
We built a Cost of a Lost Customer Calculator so you can see it, in real numbers, for your own organization. (Make sure to check out the video!) The numbers are scary, and beg the question – “How many customers can you afford to lose?”
A perfect storm for service failures
The nastiness epidemic in customer service had already raised it’s ugly head in 2019. Unimaginably, just a few months later, it got worse, as entire business models suddenly became irrelevant. Customer frustration has risen to new highs, and the debilitating effects of emotional exhaustion, burnout and chronic anxiety are affecting all of us.
The Bad News
The reality is that service failures are going to happen in your organization. They happen in all organizations. The bad news is that it is highly likely that, for the above reasons, you will experience more than usual for the next year or so.
The Good News #1
There are two pieces of good news:
The first is that your competitors’ boats will be leaking as well. And if you are better than them at service recovery, you will not only retain more existing customers – but capture some of theirs as well.
The Good News #2
The better you are at service recovery, the more customers will actively promote you. Research shows that over 70% of positive word-of-mouth comes from successfully dealing with customer issues.
Two steps to improve your service recovery
How do you recover better from Service Failures? There are two critical steps:
- Increase your Awareness. Talk with your customers. Get your finger on their emotional pulse. Look for gaps in the service they are currently getting, and get in front of them.
- Service Recovery Training. This is a unique skill set that shouldn’t be taken for granted. Equipping yourself or your team to deal with unhappy customers begins paying great dividends almost immediately.
You can also check out some of the other articles on preventing defecting customers.
Good luck! and if you haven’t already, play around with the Lost Customer Calculator – the results might really surprise you!