Cost of Poor Customer Service: Don’t Pay This!

Fact: A whopping 96% of consumers believe customer service is an important factor for their loyalty to a brand (source)

Customer experience is now the main difference between a successful and a mediocre business. With thousands of options just a click away, customers tend to lean towards the company that provides a better experience while buying.

To put it simply, poor customer service can cost you your business. Alternatively, an excellent customer service strategy can help you increase customer satisfaction.

A Case Study

Poor Customer Service Example

Whirlaway Sports, a sports equipment store, wanted to build customer loyalty, so they

started to focus on what customers want. They found out the importance of customer experiences and its impact on the consumers, so they built a customer-friendly environment.

In a blog post, one of the customers shared details. Everyone is given a warm welcome when you enter the store. The store guide knew his stuff. He asked what I was looking for. Upon telling that I am looking for running shoes but do not know much about it, he started guiding me and asked questions like what type of terrain I run on, my running style, what kind of foot I have, and my preference. They even scanned my feet to help suggest the best options.

This customer experience story was shared thousands of times on social media and yelp. As a result, their good customer service experience earned them a satisfied customer and hundreds of new leads who want to switch brands because of poor customer experience.

On the other hand, Motorola started losing clients gradually. When researched, they found out most people believe they have more information than the Motorola guides. Previously that was not the case. So what does Motorola do? They Started training their staff to be more customer-friendly and have more information than an average internet search. As a result, their sale started rising again.

Both case studies show the true meaning of good and bad customer support i.e it can make or break your business if not handled properly.

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Some Stats You Need to See

  • 54% of customers believe their expectation for customer service has increased  from what they had one year ago (source)
    This shows customers are becoming more and more customer service-oriented and are expecting more from their brands.
  • 74% of millennials say they are more impressed by a brand that has active social media responsiveness (source)
    If brands reply quickly on social media, millennials are more likely to engage with sales and buy the product, as this throws poor customer service experience out of the window.
  • U.S. companies lose $62 billion per year because of poor customer service (source)
    This figure is increasing every year as customers are demanding better customer service from businesses.
  • 51% of customers will never do business again with the same company after a negative experience. (source)
    One bad experience is all it takes for a customer to look for alternates.
  • A 5% increase in customer retention results in a 25%-95% increase in profit (source)
    Following best practices for great customer service can help keep customers and they keep coming back for more.
  • 57% of customers would contact companies for support using social media channels, emails, or a knowledge base instead of calling. (source)
    Users prefer to help themselves instead of talking to customer service agents. That is why knowledge base is the most preferred way of customer support.

What is the Actual Cost of Bad Customer Service?

Stop Losing Business
  1. Frustrated customers

    Frustrated customers are a thing every business wants to avoid. With dozens of platforms available, a frustrated customer can go to these platforms and vent out against your brand, with thousands of people reading about it.

    Lousy customer experiences are one of the main problems your customer can be frustrated with. You should have a strategy in place on how to handle frustrated customers.

    A frustrated customer will not only take his business elsewhere, but they will also take hundreds of potential customers with them and always talk bad about your business. That is why some good support tools have A.I. in place to check if the conversation is heading towards frustration. If it is, the system immediately highlights the issue to higher authorities so they can intervene and handle the case efficiently.

  2. Bad reputation

    Your product can be world-class, but if a customer is having trouble understanding or using it even after going through customer service options, you will have a bad reputation. 

    Let’s take GoDaddy as an example. They are one of the world’s biggest website hosting companies, and their servers have 99.9% uptime. But every product and server setup need customer support. GoDaddy’s support is not considered a good one. As a result, they have developed a reputation. You can see many bad reviews and blogs about how bad or misguided you can be even after talking to the customer support agents. As a result, they are losing clients, and some other companies have invested heavily in the same area and are pitching themselves as a better alternative.

     A bad reputation means people are looking for alternatives. As a result, it is lost revenue for you.

  3. Losing Business

    Having poor customer service results in disappointed and frustrated customers, which leads to serious consequences like losing business.

    Fact: 90% of U.S. customers treat customer service as a deciding factor when opting to do business with a company (source)

    This is a significant number, which proves the importance of good customer service. The actual cost of bad customer experience is losing business, which can be avoided by following a few must-have customer service practices.

Build an advanced knowledge base for your customers and give them answers fast – real fast.

Take your app and help center to the next level with CloudTutorial.

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How to Avoid the True Cost of Poor Customer Service?

Nowadays, customers are always looking to solve their queries without the need to login into a ticket or waiting on a call for a service agent to join in and listen to their problem.

Fact: Nearly 90% of customers expect an online portal or place to solve their issues and get customer support (source) is the best solution? A knowledge base to answer all the questions. CloudTutorial is built for this.

If you want to answer customers immediately without the need for any human interaction that is not heavy on the pocket, opt for TCT.

CloudTutorial believes there is no need to hire and train customer support agents when you can solve a problem immediately using a self-service knowledge base, resulting in better customer experiences.

You can create articles for the most asked questions and share them with incoming inquiries. Our text editor is feature-rich, and you do not have to switch between different editors.

With TCT’s advanced A.I. based search engine, Customers can search for the required info easily. TCT also takes care of typos, where users accidentally type in wrong spellings, our system recognizes the mistake and adjusts the query accordingly.

With TCT analytics, you can check which articles are useful, what info users are skipping, and what inquiries are returning no answers. That way, you can create and modify articles for customer satisfaction.

Other useful features include:

  • Multiple user roles can be assigned to a single user-id
  • Customizable user rights
  • Captcha to avoid spam
  • Like and Dislike button
  • Categories according to your products
  • And much more


The exact cost cannot be calculated as it varies from business to business, but a study confirms about $75 Billion are lost yearly due to poor customer service experience.
A survey conducted reveals 12% of U.S.-based customers rate lack of speed as number one reason for frustration. A knowledge base takes care of the exact problem, i.e., to answer any query within milliseconds instead of waiting for a reply to an email or waiting for an agent to join the support call.
According to research, customers start to think of switching their brand after one bad experience with the employees. It takes about 12 other interactions to reverse the negative impact. If expectations are met in the next 12 interactions, things start to get back to normal.

Bottom Line

Satisfied customers are the need of the hour in today’s digital age as one negative review, or a poor customer experience can drive customers away. It also makes your current customers frustrated and gives your brand a bad reputation, resulting in business loss.

On the other hand, the customer base increases if businesses start offering customer services better than most of the competitors. 

Statistics show customer service expectation is high, and it builds loyalty. This means solving customer issues immediately is of high priority. The knowledge base is the best way to cater to customers and answer their questions directly. CloudTutorial is one of the best knowledge bases out there to help you get on the top.

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