Poor Customer Service Costs Americans More Than $100 Billion Annually


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Being placed on hold and listening to a warped recording of "Almost Paradise" is more than just an oxymoron, it's a painful example of poor customer service that costs Americans $108 billion a year. The eye-opening numbers come from a May online survey conducted by Harris Poll on behalf of ClickSoftware, which polled 2,051 U.S. adults, 1,197 of them employed.

Whether it's employees paying their bills at the office or missing work because they're held up waiting on the cable guy, the impact on businesses in lost productivity is considerable. According to the survey's findings, employed Americans reported wasting 30.8 potential of work hours per year waiting for customer service responses. By ClickSoftware's calculations, on an annual basis, companies can lose as much as $900 per employee because of time wasted on poor customer service.

"We don't believe that most employers are aware of how much time and money employee service issues are costing in productivity," said Stephen Timms, president of the Americas division of ClickSoftware, in an email. "These are issues that impact everyone, from the CEO down to the most junior employee. It's therefore an issue that impacts the entire economy."

ClickSoftware's survey found that the top sectors where customers felt they wasted time are:

IndustryAverage number of hours spent dealing with issues
Banking6.0
Repair/Home Services5.3
Insurance4.7
Automotive3.7
Healthcare3.1
Communication Service Providers2.5
Public Sector2.2
Retail1.8
Utilities1.5
Total time30.8 hours per year

"Given all the methods to monitor customer satisfaction and retention, we do believe most companies have a general idea of the service issues that exist," Timms said. "However, we don't believe most organizations generally understand the severity or the cost implications associated with service issues."

Due to their frustration concerning poor customer service, more than one-third (35 percent) of those surveyed said they have cancelled their service or stopped using that brand altogether. Additionally, seven in 10 people (72 percent) said that their frustrations have prompted them to ask for a supervisor; one in 10 have yelled at customer reps; and 13 percent have taken to social media to express their dissatisfaction. Six percent of customers have lied to get better or faster service , 3 percent have begged and another 3 percent have shed real or fake tears in dealing with a service rep. However, when offered premium service, seven in 10 people (71 percent) said that they would not pay more for VIP treatment.

What frustrates customers the most? Forty-four percent put waiting for a service rep at the top of their list; nearly as many (43 percent) said being put on hold with the rep their number-one frustration. Thirty-eight percent said their frustration stemmed from feeling that service representatives didn't know how to fix problems. Around one-third (35 percent) of U.S. adults say among the most frustrating things is a service rep who doesn't understand their problems, or having to come back because the problem wasn't fixed (32 percent). One in five (21 percent) said that their frustration stems from billing issues, and about one in 10 said that they are must frustrated when trying to schedule an appointment (12 percent).

"These service frustrations are significantly impacting service businesses today because consumers are becoming more and more likely to demand not just a great price but a great service experience," Timms said. "Companies that offer the best experience in all parts of the service process will be the ones that retain their customers, grow, and succeed."