Your Company's Biggest Expense Is Unhappy Customers

What is a better investment? Advertising or customer service training? One study showed that organizations worldwide spend $500 billion per year on advertising compared with only $9 billion for customer service training. That's a pretty big disparity. If companies focused on solutions to improve customer service and making their customers happy, their customer retention would go up, and they wouldn't have to advertise as much to replace unhappy customers.

According to new research by the experience management company Qualtrics, bad customer experiences could cost brands $3.7 trillion annually worldwide. Customers reported that 14% of their experiences were very poor, and more than half (51%) said they have reduced or cut their spending with a company over just one negative experience.

The study revealed that after a bad experience, 64% of consumers are the most likely to stop or decrease spending with fast food restaurants and least likely to cut back their interactions with public utilities. In addition, 22% of customers are likely to stop doing business completely with an auto dealer and 6% with supermarkets.

What is the solution? Make sure you are training your employees on soft skills. It needs to be part of your new employee orientation and ongoing existing employee training.

Layoffs and customer service

I guess American Airlines believes less is better when it comes to customer service. American Airlines announced it would be laying off employees to provide new, "elevated" service to customers, USA Today reported. "Today, we announced updates to our contact center organization that will help us better serve our customers. As part of these updates, we are creating a new customer success team that will be dedicated to providing more convenient, elevated support to American Airlines customers with some of their most complex travel needs," the airline said in a statement to KXAS-TV.

The layoffs are primarily in the airlines' customer service-related positions, Bloomberg reported, such as workers that assist passengers with their lost luggage and AAdvantage loyalty program service groups. In hopes to combat this, American will be creating a division called the "customer success team." They will hire 135 workers for that new team aimed at improving their customer experience.

More focus

United Airlines wants their flight attendants to be more engaged, aware, and attentive with passengers. To help them focus more on the passengers, the use of personal cell phones is prohibited for flight attendants.

A recent United Airlines company memo contained reminders to cabin crew that they are required to be seen as attentive to customers. The memo stated, "Use of a personal electronic device and/or accessories is not permitted while customers are on board the aircraft. Customers look to flight attendants for great service. How comfortable would you be asking someone for help if they were engrossed in their cell phone? What impression would that give you? Even in public, you should always remain approachable in uniform and display courtesy to customers and other employees."

To learn more, including information about The DiJulius Group's My CX Trainer, click here.

John R. DiJulius III, author of The Customer Service Revolution, is president of The DiJulius Group, a customer service consulting firm that works with companies, including Starbucks, Chick-fil-A, Ritz-Carlton, Nestle, PwC, Lexus, and many more. Contact him at 216-839-1430 or info@thedijuliusgroup.com.