The cost of an angry customer
We all have dissatisfied, angry customers at some point, but can you quantify what their true cost to the business is? Customer Champions have previously considered the cost of customer complaints in terms of compensation and lifetime value, but perhaps we need to consider even wider issues, such as:
• Negative impact upon the brand
• The negative impact of word of mouth to friends and family, and to the much wider audience available through social media
• Opportunity cost of having to deal with this customer
• Cost of new customer acquisition to replace the lost business
• Time spent dealing with angry customers is often greater
• More senior management time is often required to deal with these customers
• The negative impact it may have on the employee’s morale in dealing with this type of customer and the likely impact on staff attrition rates
How do these costs balance out against the prospect that often when an angry customer’s issue has been resolved to their total satisfaction they have an increased degree of loyalty towards that provider, or have you just bought their happiness in the short term, and fundamentally there is not a good fit between the experience you are able to offer them and the one they are looking for?
Perhaps this just emphasises the importance of setting the correct expectations with customers at the beginning of the relationship and continuing to reinforce these through delivery against them as the relationship develops. Our own research shows an interesting comparison between customer expectations and what they actually experience.
Let us know your thoughts on the impact of angry customers on your business.