The danger in hostage marketing

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Ernan Roman
Ernan Roman

The customer service experience is get­ting worse. Results from our Huffing­ton Post study indicate serious problems.

Only 32% report that their customer service call center experience was positive. For the balance: 47% had a negative experi­ence and 21% were neutral.

This quote aptly reflects the frustration: “I daydream about suing them. From the product to the reps, they just don't care about their customers.”

Most troubling is that customers realize that they are treated poorly because firms think of them as hostages: “We are hostag­es, unable to go elsewhere”; and “I would be done with most of these companies if I had any choice in the matter.”

The impact of these experiences on three critical business metrics is major. Decreased likelihood to buy from the company: 64%. Creates a negative perception of the company: 85%. Decreased likelihood to recommend the company: 77%.

More than 64% would stop buying from the company if they were not “hostages,” with few or no alternatives.

There were clear rewards for providing a positive call center experience. Likelihood to buy from that company: 94%. Positive perception of the company: 94%. Likeli­hood to recommend the company: 86%.

Given the significant impact of a posi­tive experience, it is incomprehensible that companies do not invest in appropriate training and resources for their customer service call centers.

Given that it's seven to 10 times more expensive acquiring new customers versus selling to existing customers, companies should view their customer service center as a revenue and profit center, rather than as a cost center where they can save money. Post-sales experiences have a major impact on the likelihood of repeat purchases.

Calculate the financial cost of lost busi­ness resulting from poor customer service. Do not cut back on training, quality con­trol procedures and investment in cus­tomer service centers. Positive customer service experiences solidify the relationship with customers.

Customers expect quality care, whether the center is in-house or outsourced.

ernan@erdm.com

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