The Cost of Unhappy Customers

THE COST OF UNHAPPY CUSTOMERS DO YOU KNOW THE COST OF UNHAPPY CUSTOMERS TO YOUR COMPANY? We are living in the age of the empowered customer -- a time when a single Facebook post or tweet can dramatically impact a company. While positive customer experiences broadcasted online can reach more people than a Super Bowl ad, negative customer experiences spread even faster and more broadly, with possibly devastating effects on your business. The reality is that unhappy customers are costly -- but they don't have to be if your company takes the right approach. Engage with your empowered customers through continuous, long-term collaboration and unlock their potential as valuable assets to your company! AN UNHAPPY CUSTOMER IS AN INFLUENTIAL ONE Mobile and social platforms make it easy for customers to share their experiences to wide audiences. Customers are 3X more likely to tell their friends about a negative experience. It takes 12 positive experiences to make up for one unresolved negative experience. Reviem 80% OF PEOPLE WILL NOT BUY from a business that has negative reviews. It takes 10 to 12 positive reviews to offset one negative review. 80% Seattle restaurants reported 5-9% REVENUE GAINS following one-star increases on Yelp. According to Google, businesses with reviews of 3 or more stars get 87% OF THE CLICKS! THE MATH BEHIND UNHAPPY CUSTOMERS Unhappy customers are big losses for some companies and big opportunities for others. 1.3 TRILLION = the amount up for grabs in the U.S. consumer market 51% = customers who switched businesses due to poor experiences 81% = customers who switched say the company could have prevented it 1.3 TRILLION * 51% * 81% $537,030,000,000 = the annual cost of unhappy customers $537,030,000,000 THE OPPORTUNITY COST OF SATISFIED CUSTOMERS "TOTALLY SATISFIED" $4 %$4 $4 $4 customers contribute 14 times more revenue than 24 24 %24 %$4 "SOMEWHAT DISSATISFIED" customers "TOTALLY SATISFIED" CUStomers 24 2$ %24 contribute 2.b TIMES more revenue than "SOMEWHAT SATISFIED" customers. Ö00000 $ $ $ $ $ $ Remember: It costs b-7 TIMES MORE to acquire a new customer than to retain an existing one. HOW ONE UNHAPPY CUSTOMER COST A COMPANY $180 MILLION The True Story of a Man, a Guitar, and an Airline Musician David Caroll witnessed as United Airlines employees tossed his guitar on the tarmac during the unloading process. The guitar, worth $3500, broke at the neck. Dave asked United Airlines to pay for repairs, but it refused. After 9 months of pleas and refusals, Dave wrote a song and produced a music video on YouTube. The song, "United Breaks Guitars," has nearly 14 MILLION VIEWS to date. The result? חLLIDוח צ1 You DIEWS Tube Within 4 weeks of the video's release, United's stock fell 10%, a value of $18O MILLION! 180 MILLION 10% AN UNHAPPY CUSTOMER IGNITES POLICY CHANGE (ANOTHER TRUE STORY) When Bank of America announced it would begin charging a $5 monthly debit fee, Molly Katchpole started an online petition. 300,000+ More than 300,000 people signed Molly's petition. As a result, Bank of America apologized and removed the fee! 2$ CUSTOMER HAPPINESS IS A GOLDEN OPPORTUNITY Happy customers boost your company's bottom line. Hotel and wireless businesses that IMPROVE THEIR 1 BILLION CUSTOMER EXPERIENCE SCORES BY 10% exceed $1 BILLION in aggregate revenue. 1111111== Customers whose issues are resolved by businesses tell 4-6 PEOPLE about their positive experience. THE FORMULA FOR CUSTOMER HAPPINESS Three Guiding Principles For Your Business. Focus on a great customer experience across all company #| departments. Dig into your customer demographics, know their specific preferences, and deliver on those preferences. 90% of companies say customer experience is a top strategic priority, yet only 3% manage to deliver an excellent customer experience. 90% 3% Engage regularly with your customers through two-way dialogue. Involve customers in various stages of your business -- research, prototyping, testing, pricing -- and establish longer-term interactions through customer insight communities. #2 Only 27% of companies know the makeup of its customers' households, and only 29% know when its customers are most likely to purchase. 27% 29% #3 Provide consistently excellent service and support through your customers' preferred channels. 59% of customers would be willing to try a new brand to get better customer service. Read the Customer Revolution Manifesto to learn how the empowered customer can be an asset for your business. 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