I’ll Pay Extra To Stop Being Your Customer

I’ll Pay Extra To Stop Being Your Customer

The Liveworker
  • The Liveworker
  • Service Designer

Here’s a typical story about an incidence of poor service, handled badly – the kind of thing we specialise in helping companies understand and avoid.

A household wanted to get Internet. At the end of the online application process, the installation date was set for three weeks later than the website's promised one week turnaround. After a lot of difficulties, the household decided to cancel the contract. While a second provider activated the service for this household in just a few days, the first provider continued to charge - 20% more for a service not contracted by the customer. Store and call centre staff forced the customer to pay the whole amount, plus penalties. This left the customer extremely angry but locked into a contract for another eight months.

Organisations fail to understand the customer situation

Customer experience is not solely about one interaction or one provider. The customers have already been dealing with other providers. Some of the customers might have even engaged with more than one channel within an organisation and were given conflicting instructions. The whole experience frustrates customers, who might vent their anger on customer-facing staff, and frequently share their negative experiences with family and friends. A sense of “they’re all the same” prevails.

Reaching the point of “past caring”

When more time is needed to resolve the same issue, customers become more irritated. If the issue lingers too long, customers likely reach a point that they no longer care to fix it. Now, they are “past caring”, they are willing to do anything to get out of the contract. They may be willing to spend time on filling termination forms, to queue at customer centres or even pay an additional fee or penalty to leave you.

50-60% of customer incidents can be traced back to the ‘buy’ and ‘early use’ stages of the customer lifecycle. Most of these incidents are preventable, as they are likely caused by miscommunication, misunderstanding and a lack of clear advice.

Root causes of extreme customer irritations

Extreme customer irritations could be red flag symptoms of underlying structural issues of a company. If you fail to address the root causes of these issues or incidents, they are likely to recur. By proactively listening to your customers’ predicament, and by being willing to truly help them, you have made the first step of building a better relationship with them.

The experience of a customer issue or need starts at the moment when customers are aware of the issue and act on it. From the organisation’s perspective, the customers’ time spent on the issue is only the time logged by customer-facing staff and agents, plus the time they spend on queueing in call centres. However, they spend time on researching and investigating, talking to others and trying out alternative solutions. For every minute the organisation spends on the issue, the customer probably spends 3-5 times as much.

The cost of angry customers

Angry customers rant on social media, or lodge formal complaints to the organisation or consumer advocacy groups. These publicly accessible forms of customer dissatisfaction are only part of the story. Customers also probably stop using your product or service and switch to your competitors, and blast you in front of their friends, family and colleagues. These are the actual costs and significant risks to your business.

Over 65% of customers who defected feel that the service provider was indifferent to them, versus only 15% of them that left because of dissatisfaction with the service itself.

A systemic problem

Extreme customer irritations are usually not limited to one provider, but across the entire sector. In some sectors, customers have lowered their expectations to the level that they expect a painful experience and are satisfied with very little. Therefore, there are opportunities for companies to set new standards of product, service and price that put tremendous pressure on inferior incumbents.

Around a third of the customers who defected to another provider or brand encountered a situation in the “early use” stage of the customer lifecycle that made them decide to leave.

Take your customers’ experience very seriously

When customers feel they are not taken seriously, there is room for providers to take a bigger slice of the market by offering better services. New entrants into the market can set new standards of service with competitive pricing.  Without the willingness to address fundamental issues such as inter-channel conflicts, product complexity and finance-driven KPIs, the opportunity to gain competitive advantage might be lost.

In the financial services, energy, telecoms and healthcare sectors, many intermediaries encourage and assist households to switch providers. Market aggregators and service intermediaries tap into the service gap by offering product comparisons, simplified process and clear recommendations, and by pressuring providers to offer special deals. Up to 30% of the customers of these sectors consider switching providers within a year.

Turn preventing customer incidents Into a competitive advantage

The last thing any provider wants is to irritate the customers to the point that they are leaving for your competitors as fast as they can. These customers are your worst advocates, and it is nearly impossible to win them back. Resolving customer issues before that point, therefore, is extremely important for your reputation, customer retention and loyalty. Well-handled incidents create lasting customer relationship, while better-than-average services help you gain and sustain a competitive advantage.