Your Service Problems Are 20 Times Greater Than Your CEO Thinks

August 30th, 2011
Steven Howard

Senior Management Do Not Hear of 95% of Service Problems.

Customer research surveys show that only 50 percent of all customers complain about service problems. Ninety percent of these complaints are made only to the frontline person serving them, or perhaps to their immediate supervisor. Only 10% of customer complaints are given directly (or indirectly) to senior management.

As a result, top management typically hears only about 5% of all customer service issues! So, in a typical organization, the true service problem situation can be 20 times greater than senior management thinks.

Very few organizations ever call former customers to ask why have taken their business elsewhere. Most are either too afraid to ask or are too hurt that customers have actually left.

As I pointed out in the previous blog post, I coach my clients to conduct on-going research with lost customers, with a focus on asking three pertinent questions:

  1. have they experienced any problems or disappointments with the quality of the product delivered?
  2. Have they experienced any problems or disappointments with the service delivery?
  3. What would it take to get them to return with their patronage?

I say do not be afraid to ask. If you do not ask, you will never know the true reasons for customer attrition.

First, you may find a common cause or problem that can be fixed, or you may uncover a customer need that your product and/or service can meet with some minor modifications.

Second, almost everyone likes to have their ideas solicited. The reason for asking what it would take to have them return to your business is to give your former customers an open opportunity to express their ideas, opinions and comments.

When was the last time senior managers took a day away from their daily routine to concentrate on nothing other than calling former and current customers? What could possibly be more important than doing this at least once a quarter?

Seeking the inputs of your former and current customers, and listening attentively to their ideas, opinions and comments, is a key step in developing customer loyalty. It is also a critical practice inherent in Customer Retention Marketing, the art of keeping good customers.


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