The Truth Behind The Cost of Poor Customer Service

Broken Guitar Cost an Airline $180 Million – How One Bad Customer Experience Impacts Business

In 2008 a single customer with a bad experience supposedly cost United Airlines an Estimated $180 MILLION dollars! Musician David Caroll was traveling on a flight with the airline when allegedly employees tossed his $3,500 guitar and broke it at the neck. The musician claimed that after months of seeking a resolve the airline refused to pay for the repairs and evidently failed to address the artists concerns, so in 2009 he wrote a song and published it on YouTube titled “United Breaks Guitars” which to date has received over 14.3 million views. The result of this perceived bad customer service leading to the video was a whopping 10% drop to United’s stock value, which at the time was estimated at an approximate value of $180 million dollars.

Now we know that’s not a typical story, but everyday companies deliver poor customer service experiences that easily result in the loss of customers with annual spends between $500 – $3,000. If you consider that a typical family will eat at their favorite restaurant at least twice a month with an average ticket of $60, you quickly see how one bad experience that sends them over the edge would equate to $1,440 a year in gross revenue. Now multiply that times 20 customers, 30, or even 50 and you see the disasters that even 1 bad employee can create.

Between marketing and salesman commissions alone the cost to bring a new customer on board can be alarmingly more expensive than retaining your existing clients. Happy customers are loyal customers and will generally invest more with those that prove consistent value and provide impeccable customer service. The below infographic created by Vision Critical tells the story and describes the pain associated to bad customer service.

Cost of Poor Customer Service in the United States

Take Care of Your Customers From Their First Call

Many people don’t realize the impacts of something as simple as leaving a customer on hold for long periods of times or when telephones are not answered but customers in need of services. Often times businesses are not even aware of their lost customers because they simply just move on to a competitor rather than take the time complain. While missed calls may not add up to a $180 million loss it will add up over time and businesses really should focus on the value of keeping their existing customers content. Find out how an answering service can help improve customer service today. And whatever you do, if you break your customers guitar just fix it!

Author: Michael Cynar

Michael Cynar has over 30 years of executive call center and answering service experience. He is a successful business owner and lead generation expert and shares tips to help other entrepreneurs build and grow their business through leads generation and lead capture solutions. His mission is to share carefully guarded marketing tips that will help small-medium business compete on a smaller budget.