A complaining customer is no fun. But a silent customer is far more dangerous.
We often mistake silence for satisfaction. The unfortunate reality is, however, that when customers encounter a mediocre or even a poor service experience, more often than not they stay silent. Rather than take the time and effort to complain, they simply take their business elsewhere.
According to a Bain & Company survey, major companies lose, on average, half of their customers over a five-year period because of poor customer service. For every one complaint you receive, it is likely that 24 others received the same level of poor service but did not report it. And of those 24 customers, approximately 22 will eventually take their business elsewhere. While one bad experience may not be an end-all, every customer has a breaking point that will send them packing. Most likely, forever.
When it comes to customer dissatisfaction, ignorance is not bliss. Failure to recognize when your service experience is falling short can have the following impacts, which can devastate your reputation and your bottom line.
Why customer silence is deadly
Lost lifetime value of customer - Losing customers is never good. You’ve worked hard to attract them, so don’t let them go. Plus, new customer acquisition is expensive- attracting a new customer costs up to eight times as much as keeping an existing customer.
Impact that lost customer has on potential prospects - It's human nature, we are more likely to share bad news than good. In fact, research suggests that an unhappy customer will tell between 8-10 friends, colleagues, and/or family members about a disappointing service experience. The impact can be widespread, far reaching, and seriously detrimental.
Bad online reviews mean bad news for your business - Just because a customer doesn’t file an official complaint doesn’t mean he/she won’t take her opinion to the blogosphere. With Yelp, food blogs, Twitter, Facebook, and countless other online review sites, a poor review can be incredibly influential.
Why customer complaints are beneficial
Highlights a problem - Complaints point out issues you may not even know exist. By asking specific question and following-up, you can create a solution that will improve your business and prevent the problem from occurring down the road.
Free intel - Complaints are valuable assets that provide free insight about what is important to your customers and what they are willing to spend money on. Every year, organizations spend significant time and money researching just that.