The Hidden Costs of Poor Customer Service

Whether you are the CEO, the receptionist or the guard at the gate, customer interaction is an inevitable part of our day. While the pundits stress that any interaction with a customer is a service touch point, the reality is far from it. Receptionists are not always friendly and most guards couldn’t care less.


People want to talk to real people that can help!

We are all aware of the pitfalls of poor customer service, but what are the real costs to a business? Research shows that bad customer service costs companies $338.5 billion a year, globally. But before we dive into the building blocks of bad customer service. Let’s look at the flipside – what qualifies as good customer service?

The fundamental requirement to providing good customer service is “Knowing Your Customer”. KYC is the cornerstone of any long-term client relationship. If you know your customer – you can provide personalized service and you can provide the service in a manner that is convenient to them.

If you know your customer, and the customer touch points and your employees are competent and responsive – that’s good customer service.

Unfortunately, as a survey suggests, most companies that think they provide good customer service, don’t … in the eyes of the customer.

So why do so many companies fail at providing good customer service and what are the hidden costs of poor customer service?


  1. One of the biggest pitfalls of poor customer service is that most dissatisfied customers don’t complain. You generally hear from only 4% of unsatisfied customers. As for the rest, they simply find somewhere else to go.
  2. Poor customer service also leads to loss of business – the opportunity cost of this is immeasurable. There is no magic formula that can calculate the dollar amount that you have lost to potential customers.
  3. Word gets around. Today with social media word gets around at the speed of light. This leads to a bad reputation. Your partners and affiliates may back out due to this. Take the recent Ryan Lochte Olympics robbery debacle – four of his sponsors dropped him overnight as it was affecting their brand values and integrity.
  4. Hiring top talent will prove to be challenging. Individuals are brands in their own right. They will never associate themselves with companies that have a reputation of providing poor customer service. Which means the competency required to provide good customer service is no longer available to you.

Let’s look at some numbers associated with poor customer service:


  1. 67% will never use your services again after a bad experience
  2. 49% will not recommend you to friends and family
  3. 34% will share a review online or on social media


With point #1 and #2 the fallout isn’t that great. Point #3 is the worst-case scenario, where if the review states your service is poor, this could have a colossal ripple effect on your business for months, if not years. As you know, once something is published in cyberspace, it is ridiculously difficult to erase.


You might think that your product is so unique that customers have no choice but to come to you. Wrong! Customers rarely remember the product; they remember the service they received when buying the product. Their positive or negative experience reflects on what and who you are as a business.


In Dubai for example, Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s Prime Minister and Emir of Dubai recently announced that his new cabinet included its first “Minister of State for Happiness”. Why do you think this is?


Dubai is one of the most cosmopolitan cities on the planet, with access to world-class infrastructure and facilities. Why should the government care about the happiness index of people? The government understands that they are not selling facilities, goods or services, they are selling experiences. The ultimate goal of any experience is happiness. If Dubai is to retain the people who move there, then they need to make them happy and keep them happy.


Would you spend money on something that makes you unhappy? Then why should your customers? The cornerstone to happy customers and customer retention is obviously good customer service.


How do you recover from bad customer service?


Whilst we can all agree that technology has made our lives easier, it has also automated many of our daily human interactions – this includes customer service. More and more customers are demanding live interaction. You can recover by providing more hands on service, by interacting with your customers via their preferred channels and by providing better content. These are easier said that done, but over a period of time, they have a positive impact on your bottom line and keep your customers happy J.


boris johnson

Is your digital marketing up in the “hair’?

As a creative marketer you already know the ins and outs of digital marketing. Impressions, engagements, click through rates are familiar jargon. You are now looking to innovate and be strategic without affecting your work-life balance. All mature digital marketers have been there. You are at a tipping point but there just aren’t enough hours in the day. We feel your pain and have compiled a list of apps that will help you achieve your goals without you having to look like Boris Johnson’s hair on steroids.

So what are your priorities? As a digital marketer you already know that 75% of online video viewers have interacted with at least one video ad this month. This makes video priority #1.

Making videos doesn’t have to be a time consuming process that involves studios and specialists. A smartphone and some creativity is enough. With Vine – Twitter’s video blogging app, making and sharing video content is easy. Vine gives you the ability to tell a story in six seconds. If you have an incredible moment or story to share with your customers, this is the right app. The best part? You don’t have to spend hours thinking, brainstorming and story boarding.

Now you have video covered. What’s next? Well, “researchers found that colored visuals increase people’s willingness to read a piece of content by 80%.” That makes info graphics priority #2. But if you are not skilled at Photoshop or other design software, creating an info graphic can take days for coordinating, designing and man-hours. This is why we love the Piktochart app. It has an easy to use drag-drop template and over 500 templates that you can choose from. Idea to execution takes just a couple of hours, and the best part? You can do it on the go – while you are riding the metro or stuck in traffic in downtown Dubai. Oh and it’s free!

Ok so now you have the visual content taken care of. Next you need to look at some direct inbound marketing activity. Emails as you know are making a comeback – more and more companies are reporting higher engagement from emails. In fact, “you are 6x more likely to get a click-through from an email campaign than you are from a tweet.”

Some of the more mature email marketing platforms offer a host of features that can be overwhelming to set up a simple drip campaign or email newsletter. We prefer Mad Mimi. It has a simple user interface and one of the most generous free plans available. What’s good? Combine it with a Vine video and have your email loaded with an embedded video. Emails with video increase click through rates by 200 – 300%.

Now you have taken care of content and engagement but you still need to measure and monitor effectiveness. Because social media never sleeps, monitoring becomes a 24/7 job. With the help of Mention, you can take a break. You can monitor your brand mentions, engagements and respond directly from the Mention dashboard. It also tracks brand influencers and trends. You can monitor and ensure that your keywords are trending. What’s more, if you have a team, you can all communicate via Mention.

You last priority, as a creative digital marketer is to ensure business as usual. While you are creating Vine videos, info graphics and email newsletters – the day-to-day social media activity needs to continue. Buffer will help you do just that. It helps you manage, schedule and publish all your social media channels, from one place. The extra bonus? It connects with your Mention account to ensure you get the in-depth analytics that you need.

Whether you are a one-man digital marketer or managing a team, these five apps are all you need to create an integrated online marketing experience for your clients without compromising on engagement, SEO, mentions, leads or sleep.



All of us are to some degree influenced by the dramatic turn of events affecting the world economy – especially those businesses in the UAE and around the world which are under considerable pressure to retain cost-conscious customers.

Irrespective of whether you are managing a team, a division or a company, you will be under the gun to do more with less, while at the same time trying to maintain employee motivation and focus.

The Response to Recession

As the economy moves unsteadily on the brink of a recession, inevitably, among the first victims of corporate cutbacks will be the elements most vital to a robust talent management strategy. A few examples of such strategic moves and their impact:

  • Budget Cuts: HSBC cutting budgets on recruitment, entertainment and travel. Derailed by the Chinese slowdown, the giant bank aims for planned cost cuts as an attempt to face poor performance in Asia.


  • Lay off employees: British Petroleum announced plans to slash 4,000 jobs in exploration and production due to declining oil prices. To touch on stats, the company plans to shed 10% of the total workforce over three years.


  • Spillover effect: Companies in the oil and gas industry in the UAE decreasing their hiring efforts to survive the downturn. This also leads to high concerns that there could be job cuts in other sectors such as retail and hospitality in Dubai.


  • Stress-producing event: Financial crisis can negatively affect an employee’s psychological state, health and work performance.

However, such moves will be short sighted because the need for talent has never been greater. Companies that deal with economic slumps by cutting back too drastically on talent may find themselves unprepared for the long term.

The Underlying Issue: Managing Talent

In such trying times, the first, almost instinctive reaction of management is to reduce expenses by cutting salaries and jobs. For that reason, many companies place Talent Officers or HR Managers squarely in the middle of their turnaround plans.

However, the most pressing issue is the lack of talent management during an economic uncertainty or stagnation. In an environment of recession, every difficulty that emerges can demoralize even the best of employees. Their experience, talent and skills might not be enough to face the challenges.

Therefore, it is important to have on board people-sensitive managers who understand the importance of recognising and fully utilising the knowledge and unique skills of each employee. The dire need for motivation in the workplace under such demanding conditions is more important than ever, in order to mitigate potential reduction of productivity and to achieve operational excellence.

Let’s not forget, all carrots don’t look the same – especially during an economic downturn where the concerns are of a different nature: forced early retirement, change in one’s financial situation, the duration of unemployment, decrease level of income and fear of losing one’s job.

Instead of paying lip service to common phrases such as ‘people are our most important asset’, organizations should demonstrate that they are committed to looking after their employees during tough times, by investing in them through implementation of training and development programs, for instance.

Recession: an Opportunity

Investing in human capital during a downturn is, in most cases, considered a luxury. Hence, recessions offer the perfect opportunity to reach out.

When financial resources are scarce, the means to advance the company is through employee engagement and commitment. Utilising the maximum potential of one’s employees is an effective way to not only stay afloat but propel the company to gain a competitive advantage.

The effect a recession has on employees cannot be mitigated through one technique alone; rather it requires a combination of tactics. Managers may use various approaches, – one effective method being Training and Development.

Evidence of Demand

A workforce with low absenteeism and turnover rate is crucial for a successful business, especially during an economic slump or during road to recovery.

  • According to a study of 100 HR managers from ILX Group, an internationally recognized leading provider of professional learning and consulting solutions, 51% reported boost in employee morale as a key reason to conduct training.
  • Another study by the ASTD (American Society for Training and Development) of over 2,500 companies with well-developed training programs highlights 24% higher profit margins and 218% higher revenue per employee.
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Do you really want to cut your training budget?
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The Importance of Training

Attracting and retaining talented and highly skilled staff is fundamental for those operating in competitive industries such as, Oil and Gas, IT, Pharmaceuticals, Banking and Financial Advisory, and Fashion.

Economic downturns demand fresh thinking, new ideas and innovation, which are most likely to be found outside your industry. What we do know is that those most likely to thrive in the current environment are those with resilience and high levels of self-knowledge and self-worth.

Strategic investments in your talent ensure the company is able to cope with current challenges and while readying itself for the return of better times. This is where corporate training in Dubai significantly contributes to an organization’s talent management efforts.

Companies can benefit from sustained investment in training and development in many ways – because the natural defensive barriers we all carry around at work can be dropped during dire circumstances such as facing a financial crisis.

What can companies do to stretch their Training & Development budgets?

  • Seek out corporate training firms in Dubai who can address multiple topics instead of hiring different trainers for each topic.


  • Enjoy free concessions by offering multiple enrollments to corporate training in Dubai. In addition, get better pricing if the sign-ups are higher.


  • Make it part of the deal that employees privileged for outsourced training are required to return and share their learning outcomes with their peers and colleagues.


  • Seek out not only training you require but perhaps additional needs such as Effective Sales Management, Digital Marketing Essentials, Executive Coaching and so on.


  • Ensure that certain avenues of corporate training in Dubai are always outsourced. This way, you are equipped to look outwards in terms of best practice rather than remaining inwards-focused.


The Way Forward

Recession or not, talent is more important than ever. As noted, the temptation for management during a recession is to slash training and development budgets. However, it is smarter to do just the opposite although this may sound counter-intuitive during a downturn.

The bottom line is that while the recession will eventually end, the fierce competition for talent is going to be a business challenge for the foreseeable future.

It is two-fold: The organization invests in talent management, such as by implementing training and development programs for employees to boost morale and reinforce positive motivation. In doing so, the effects of an economic downturn on employees as well as the organization along with positive motivational approaches, have the potential to strengthen organizational performance, even in the face of a major crisis.

If you are looking for corporate training in Dubai to motivate and boost employee morale, ISM Dubai offers a variety of courses to suit your needs and budget. Get in touch with ISM Dubai for more information.