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The Cost of Bad Customer Service

The Impact of Bad Customer Service on Your Customers, Employees, and ROI

Shep Hyken interviews Christine Churchill, Founder and CEO of the Customer Service Institute of America (CSIA). She shares how organizations can identify, measure, and address issues to improve customer experience.

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Top Takeaways:

  • Customers are smarter than ever before. They don’t benchmark you against a direct competitor. They’re comparing you to the best service they’ve had from any company out there.
  • When customers were asked to define great service, they described a company with people who can resolve problems, know their products, are easy to reach, and don’t waste their time.
  • Investing in your employees’ training makes them feel good about themselves. Give them the tools so that when a customer is upset, angry, or yelling, they know exactly how to handle the situation.
  • Your team members feel the pain points in your business process as much as your customers. Customer surveys are helpful, but asking your team members where these glitches are in the process is the first thing you should do.
  • Christine also shares these stats and facts about the cost of bad customer service for an organization:
  1. 89% of consumers have said that they will spend 17% more on a service if they feel that they will receive a better service experience.
  2. If you can increase your customer retention just by 5%, you can improve your bottom line revenue by 25% to 95%.
  3. A 1% increase in CSAT results in a 4.6% increase in overall market value.
  4. And Christine shares the formula businesses can use to calculate the cost of bad customer service. Tune in!


“Everything is digital. Anybody can look up and see the service experiences other people, who are their peers, have had with your company before they buy.”

“It’s not just customers leaving your business that cost money. Bad service to your internal customers (your employees) also costs money.”

“Always ask your team for their ideas. Their ideas are free, and often they are the ones that are going to impact your business the most.”


Christine Churchill is a customer experience expert and the Founder and CEO of the Customer Service Institute of America. She has worked with organizations around the globe from a variety of industries, management styles, training approaches, systems, and technologies.

Shep Hyken is a customer service and experience expert, New York Times bestselling author, award-winning keynote speaker, and your host of Amazing Business Radio.

This episode of Amazing Business Radio with Shep Hyken answers the following questions and more:

  1. What is the cost of bad service?
  2. How do you measure the cost of bad service?
  3. How can organizations identify the cause of bad customer service?
  4. Does customer service affect retention?
  5. What makes customer service great?

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