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BizReport : Ecommerce : February 19, 2010


Report: $83 billion lost because of bad customer service

The customer is always right. It's an age-old saying that retailers live by. But, according to a recent report customer service, specifically bad customer service, is costing businesses billions of dollars each year. Analysts from Greenfield Online, Datamonitor/Ovum and Genesys found that more than $80 billion is lost each year because of bad customer experiences.

by Kristina Knight

Not only is bad customer service costing money on singular purchases, it is funneling into a non-shopping pattern. The researchers found that two-thirds of consumers have 'ended a relationship' with a retailer because of one bad experience and 61% have taken their business to competing brands.

The problem is even bigger on a global scale. The report indicates that more than $300 billion is lost each year around the world because of bad customer service with $243 billion then being spent with competing entities.

Who is being the hardest hit because of bad customer service?

• Cable/Satellite companies lost about $12 billion in 2009
• Financial services lost more than $10 billion
• Utilities companies lost nearly $2 billion

Although the money lost is a huge issue, the biggest problem is that consumers are leaving the companies because of a customer service experience and jumping ship to competitor properties. This means not only a loss when the initial experience happens but continued losses because these consumers will not return for future interactions. On average consumers are flipping companies twice per year.

What are consumers most upset about?

• Automated self-service
• Prolonged waits for help/service
• The need to repeat their issue
• Inability to switch communication channels

Tags: customer service, Datamonitor, ecommerce, Genesys, Greenfield Online, Ovum, retail










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  • Realistically, the facts here don't surprise me. The fundamental purpose of any business module is to provide an exchange in which ensues satisfaction and convenience for the consumer. It doesn't seem far-fetched to grasp that low-interest business efforts in cultivating proper customer-service experiences would result in a severe lack of loyal customers. I mean, if you can't ensure a high-quality customer experience - why would consumers commit to pay for your service? Especially in the case they've faced trouble in their first purchasing experience. What strikes me as interesting, however, is the conclusory projection that consumers find the process of contacting customer-service to be far more frustrating and detrimental to a business than how they will actually handle and resolve the problem at hand. Hmm, very interesting info!

  • Supra13

    i have never ever had such horrible and horrendous service from both customer service and management.i have been with out phone service for over a week-n-half (and counting) for something that i already paid for. I have used the phones of everyone i know (sense i don't have service) to call boost mobile customer service. They are the rudes most unkind group of people working in such a big company. I spoken to customer service representative and management from Texas,California ,Caribbeans and God knows where else trying to rectify the problem for days now. I told them to give me a refund for the service they didn't provide because i decide to break ties with boost and look for another provider. A rep offered me a decent deal to stay with them,(which was the wrong choice). It was a month of service free,a 30% off discount,plus a $20 off offer on choosen android phones. When i decided to redeem the deal they offered me the following day,they didn't want to honer the $20 off. So, i decide to just leave and looks for another provider.i ask for my money back and they said they couldn't give it back my money even though i paid 2-3 days before not having service.they TOLD me,either you take what we give you or you can leave with no refund and no discount. I was between a rock and a hard place.the point is the principal of honoring the word Of the company and valuing there customer way better.once they new phone i was FORCE to purchase starts getting old and malfunctioning, you better believe am going to another provider and never ever doing business with them again.i will be sure to spread the word of the staff and management in a company called BOOSTMOBLE.THE INTERNET IS A POWERFULL SOURCE!!


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