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How Poor Customer Service Will Destroy your Startup in 2020
Emily Randolph
written by
Emily Randolph
last updated
July 15, 2020
How Poor Customer Service Will Destroy your Startup in 2020

Poor customer service causes a lot of problems for customers, and, therefore, for your business. 71% of consumers ended a business relationship due to a poor customer service experience. 

The cost of poor customer service is something that you do not want to face. Relationships break from it and leave your company with terrible losses. Poor customer service is bad for business in any form, and even when it is properly dealt with, it will leave a bad taste in customers’ mouths. This will destroy what you have built and what you have yet to build because customers will terminate their relationship with your company. 

Modern Customer Service Problems

Customer service is changing as the internet adapts and changes with new advancements. For example, in 2020, Artificial Intelligence continues to dominate. It has changed the way companies think about and deal with human interactions. And as customer service changes, the problems customers face also change with it. You will deal with rude customers time and time again because of the following, but don’t let it destroy your business.

Live Chat Response Time & Availability

Response time within live chat can be very slow and a representative is not always available right away. This can be especially hard for small businesses without enough resources to keep up with the volume. 

For example, a customer has a question on a time-sensitive issue, so they call, email, or try to use chat support. If a representative takes too much time, they will either leave to find their answers elsewhere or give up altogether. Not having enough resources for the type of support you offer will not support you or your customers well. 

Live chat can sometimes be just as bad as waiting on hold on the phone. And in both phone calls and live chat, wait times are hard on the customer. Your users don’t want to wait on an answer or a representative that may not even have an answer. This causes a rift between you and your customers. The relationship is broken and you would have to do a lot to try to mend it.

Inconclusive Answers

Even when the support is there, it’s not always helpful. Customers often receive answers that don’t relate to the question they asked in the first place. They are asked to repeat their question or information many times and most of the time they are left without an answer or an “I can’t help you.” 

Quality is often outsourced or handled by overworked employees. Because of this, there is no connection between customer and customer service. It is a useless interaction that isn’t productive for either side. 

Chatbots

Chatbots are just a shotgun approach for businesses to avoid customer support, but it is often negative ROI for businesses. Supposedly, it is a very popular support method because it allows users to avoid unproductive phone and email conversations. But it is not as quick and easy as it sounds. 

They aren’t quick at all, actually. The AI part is only based off of the data you put into it, so it can take a while for the bot to understand or find an answer to a complicated question. As far as fast and convenient options are concerned, chatbots only provide a narrow scope that helps a minority of your users while the majority bounce away. 

In theory, customers should receive their answers right away. But you will often get the inconclusive answers mentioned above, or get redirected to a representative anyway. If there is a question never seen before or not programmed for the chatbot, it will either give a random answer or not provide an answer at all.

What Poor Customer Service Will Cost You

Poor customer service does more than just cost your business money. It also costs you many other things that you can’t afford to lose.

  • Lifetime value of a customer
  • Company growth
  • Your reputation
  • Employees

Lifetime Value of a Customer

A customer’s lifetime value is their total worth to your business over the course of their relationship with your company. It costs more to gain new customers than it does to keep existing ones, but poor customer service makes it very difficult to keep or gain any customer at all. 

Most companies do not have the right customer service mindset. Mindset drives customer loyalty, but poor customer service drives customers away. 

Company Growth

If your customer support is suffering, you are inherently limiting your company from achieving the next growth goal. Say your goal is to add 100 customers, but you’re churning 2 customers for every 3 acquired. You will greatly struggle to reach your goal and may even give up. 

As a startup, this can’t happen. In order to do well, or even just to stay afloat, you need to acquire customers and continue growing. 

That being said, U.S. companies lose more than $62 billion annually due to poor customer service, and poor customer service will also create a downward spiral for your companies profits. As a small business or startup, this is a scary thing to look at. You don’t want to think about losing money before you even have any to begin with. 

However, this is only due to poor customer service, so growth can still be a possibility for you. If you work to maintain good customer service, you are on the right track to building a customer base and growing your business.

Your Reputation

Reputation is a very important aspect for businesses. However, it will be the first thing to take a blow to the gut if you offer poor customer service. Customers are quick to write negative reviews and will not hold back on social media or vent sessions with family and friends. If someone is treated poorly, everyone will know it.

Word spreads fast, and your reputation will suffer for it. 

As a startup, your reputation may be nonexistent. That doesn’t mean you don’t have to worry about it, however. Just like when you are 18 years old with no credit, you don’t want to start your online reputation on a bad note. Trying to backtrack and change it will be much harder than starting off with good customer service and happy customers.

Employees

It is not just the customers that are angry with poor customer service. Businesses, particularly small businesses with fewer employees, really struggle to hold onto those employees. If they are having to answer the same question over and over, and they are the only representative, the task can be incredibly difficult and overwhelming.

Employees will leave your company if you don’t take care of the customers that help employ them. They may get burnt out, or they may just get tired of having to keep up with everything. Imagine working for a startup, super excited to get going. Only on your first day, you have to answer questions about “why your product sucks”.

You need your employees to be engaged with the product and the support so you don’t lose them. 

How to Avoid Paying the Price for Poor Customer Service

Providing good customer service can fix all of the poor customer service problems. Each cost mentioned above has a pretty big impact in setting your company back, but they can be easily avoided by trying some of the following:

  • Reach out to make amends
  • Set up a knowledge base
  • Create a customer retention strategy
  • Reward good employees and create a good company culture
  • Attend to customer issues quickly

You can’t ignore poor customer service. It won’t go away on its own. You have to take the steps to make it go away.

It doesn’t have to cost a fortune either. You can start with a small solution, like ChipBot, and grow out of it organically as your company grows and your support continues to deliver. 

The cost of poor customer service will be a battle your company continues to fight. You have to continue to make the sacrifices or you will continue to pay the price.


Want to win the battle over poor customer service? Implement ChipBot on your website today!

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