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Study: Employees Are Letting Customer Service Slip—And It Costs Businesses Big

New Study: Employees Witness 19 Incidents of Customer Abuse per Year; Few Say Anything About Them; Result Is $54,000 Average Loss to the Company per Silent Employee

Provo, Utah Nov. 10, 2015Gary was flying home from his father’s funeral. His plane touched down, was delayed on the tarmac for 45 minutes and, due to a last-minute change of gates, Gary missed his connecting flight. Frustrated, tired and still grieving, Gary approached the gate attendantwho promptly yelled at him about missing his new gate. Gary lost it. Apparently no one at the airline reported the incident. Gary has not flown on that airline since.

A new study conducted by VitalSmarts, a TwentyEighty company, reveals that each employee who witnesses bad customer service and fails to speak up costs the company an average of $54,511 per year. The study also found that organizations can recoup those costs by creating a culture where employees feel empowered to speak up and confront incidents of poor service.

According to the study’s coauthors, Joseph Grenny and David Maxfield, authors of the New York Times bestseller Crucial Accountability, only 7 percent of employees can be counted on to speak up when witnessing an incident of poor customer service—despite the fact that 66 percent of them say they are capable of helping solve the customer’s problem.

Gathering data from 991 respondents, the study also found:

  • A typical employee witnesses 19 poor customer-service incidents per year.
  • Those incidents together result in a 17 percent drop in revenue annually per customer.
  • 75 percent of business-to-consumer (B2C) customers said poor service negatively affects the business they do with that company by 50 percent or more—vs. 42 percent of business-to-business (B2B) customers.

“We’re facing a ‘crisis of silence’ in the corporate world—people simply don’t hold others accountable for their actions,” Grenny said. “Whether it’s because it ‘makes me look bad,’ as our study suggests, or whatever the excuse may be, the business world is suffering from a serious case of ‘I’m-not-my-brother’s-keeper.’ It’s an accountability issue. And it’s having a devastating effect on organizations.”

Interestingly, the study also found this lack of customer service is an issue of motivation rather than ability.

“We scratch our heads and wonder why people don’t speak up,” Maxfield said. “And looking deeper, a critic might question, ‘Even if you DO speak up, how can you know you’ll be able to satisfy the customer?’ And the answer from our study is: two-thirds say they CAN solve the customer’s problem well enough to avoid any loss of business. Clearly, this crisis of silence is not so much a lack of ability. It’s more a lack of motivation.”

Grenny and Maxfield suggest leaders talk to their employees about the crisis of silence and share examples of not speaking up. They need to be quick to spotlight positive anecdotes, as well as opportunities for the business—such as the statistic that the employee who speaks up every time earns the company as much as $54,000 per year.

Poor customer service, unfortunately, will continue at some level. And when someone does observe an incident with his or her colleague or subordinate, Grenny and Maxfield offer a few tips for respectfully and effectively speaking up:

  1. Talk face-to-face. If possible, speak to them in person and privately.
  2. Assume the best of others. It’s possible the person is unaware of what they’re doing. Begin the conversation as a curious friend.
  3. Talk tentatively. Begin to describe the problem with, “I’m not sure you intended this . . .” or “I’m not sure you’re aware of this . . .”
  4. Start with facts. Not only are conclusions possibly wrong, but they also create defensiveness. Share the facts first. Say something like, “When that customer said they disagreed with you, you said . . .”
  5. Ask for others’ views. Ask if they saw the issue differently. “Is that what you intended to say?”
  6. Use equal treatment. This applies to everyone, regardless of title or position. People deserve to be treated with respect.

Grenny and Maxfield will speak on this topic Nov. 18 at 1:00 pm EST in an e-speech entitled “Five Crucial Conversations at the Heart of Customer-Centric Organizations.” Register at vitalsmarts.com/customerservice.


Note to Editor: Grenny and Maxfield are available for interviews. High-res infographics and copies of the study are also available—as are copies of their books Crucial Conversations, Crucial Accountability, Influencer, and Change Anything.

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