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The Good, the Bad and the Angry – The Real Cost of Unsatisfied Customers

Normal customers are expensive. Angry, unsatisfied and vocal customers are MUCH more expensive – and it doesn’t matter what industry you’re in. Getting new people to buy your product/service is time consuming and expensive. Once you’ve earned their business and delivered your product or service, several things can happen. They could be ecstatic with the experience and tell some friends about it. The average number of people who told about a good experience is 9, according to American Express. Sometimes things don’t go as planned and they aren’t too happy with the experience. Now here’s the thing. In most cases, people avoid confrontation; they’ll avoid saying anything bad about your company to you. But sometimes, you get an angry, vocal customer. They don’t hesitate to unload. You were late, the service was sloppy, the product didn’t work. You get the idea. When this happens, I’ve got some bad news – 26 other people, on average, were also disappointed, according to the White House Office of Consumer Affairs.

It gets worse. Each of those 26 people, on average, will tell 16 people about their poor experience with your company, calculated American Express. This means that, including the original customer, 27 people each tell 16 other people about their poor experience. Do the math. That’s 432 people who hear something negative about your company. On top of those, you have the customers you’ve lost. The rate is around 91%, estimated Lee Resources. So, of the 27 total unsatisfied customers, you lose 24-25 of them.

Let’s run through a hypothetical scenario. An average customer does $1,000 of business with your company per year. You get an angry customer complaining about a poor experience with your company. Using the prior figures, you’ve lost about $24,000 to $25,000 from unsatisfied customers who never complained and just quietly stopped working with you. On top of this, those customers have told about 430 people in their network to avoid your company. Let’s be conservative and pretend out of 430 people, only 10% are potential customers. Of 43 potential customers, 50% decide to never work with you. That’s a loss of potential business around $200,000 per year.

To recap: ONE angry customer; $25,000 in lost business already; $200,000 potential business gone.

Keep your customers happy. The basics all apply here: have empathy, be prompt, say “sorry,” acknowledge if a mistake was made, and do whatever it takes to turn that experience around. Once you’re done with that angry, vocal customer, re-examine your processes to avoid the same mistake and prevent losing any more customers the same way.

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