The cost of bad customer experience

6 min read

You may think that the cost of poor customer experience is only a financial one, but it goes far beyond that. Poor customer experience can damage your brand, reduce customer loyalty, and lead to missed opportunities. In today's digital age, where customers have more choices than ever before, you simply cannot afford to ignore the importance of delivering excellent customer service. Use this blog post to learn more about the cost of poor customer experience and why you need to make sure your customers are always happy.

Customer experience is about a journey your customers go through with your organization across a number of different touch points. As they pass through these various interactions, from becoming aware of their need and your product as a solution to fulfill that need, purchasing, onboarding, use, and so on, their perception of the product and your company forms. The sum total of these interactions creates the customer experience.

When any one of these touch points fails, your business is at risk.

73% of U.S. consumers say that customer experience is a very important factor in their purchasing decision, so much so that even if they love a company or product, 59% will still walk away after several bad experiences and 17% will walk away after just one bad experience. (PwC)

This means that a relevant marketing message alone is not enough.  A great product on its own is not enough. Great customer support alone is not enough. Only when all relevant factors combine seamlessly, can businesses achieve a truly great customer experience.

In this blog, we’re going to talk about exactly what happens when your customer experience is lacking and what often causes this.

The cost of poor customer experience

You lose customers

Loyalty is what keeps customers coming back, and it's all thanks to the experience you provide them with. A study by Tempkin Group found that 86% of consumers will buy from businesses again when they receive a great experience while only 13% say the same thing after receiving a very poor experience!

You ruin your brand’s reputation

What do customers really think of your company? The mass social media and hyper-connectivity of today's world has led to democratization in customer opinion. Customers are now able - for better or worse - to voice their concerns with just about any product they purchase online; whether it be positive feedback or negative criticism. 81% will share a bad experience with friends and family in person. ⅓ of Americans take their complaints to social media, for thousands to see. An additional 35% go to review sites like Yelp (and remember, these sites influence 88% of e-commerce sales).  On average, a person will tell 9 to 15 people about a negative experience.

You lose sales

Do not underestimate how a poor customer experience impacts your bottom line. After all, companies that excel at customer experience drive revenues 4% to 8% higher than those of their market, according to Bain, and brands with superior customer experience bring in on average 5.7 times more revenue than competitors that lack in customer experience. The sheer scale of this loss in terms of sales is simply staggering. VisionCritical estimates the overall impact of bad customer experiences in the United States is more than $537 billion.

You miss the mark on what customers really want

Neglecting customer experience means you miss out on providing customers with what they really are looking for: a positive, emotive experience. That’s why 86% of buyers are willing to pay more for a great customer experience.

You miss out on talented staff

Poor customer experience can tarnish your company’s reputation. As a result, it becomes increasingly more difficult to hire and retain good employees. More than 70% of U.S. workers will not apply for a job at a company with a negative reputation and will have to pay 21% more in salaries to keep employees on board.

Common areas where customer experience fails

When customer experience is neglected, negative impacts can have long-lasting effects that can be hard to recover from. Here are some examples and situations that can create lead to bad customer experiences.

  • Long wait times – A customer wait time analysis has shown that people won’t wait very long before hanging up. In fact, customers are willing to wait only 14 minutes before being served. In one survey, businesses reported that they lost 75% of customers due to waiting times. Long wait times cause intense frustration. On the other side of the line, they impact your employees by creating stressful environments as customer service agents feel pressured to move through customers as quickly as possible.
  • Unresolved issues/questions – are usually a function of poor staffing, burned-out employees, or an inefficient operating system. Overlooked emails, employees who cannot provide the required level of assistance needed, and lack of customer self-service options can greatly impact the customer experience.
  • Poorly trained or incompetent employees – Poorly trained, inexperienced, or stressed front-line employees can impact the customer experience in a negative way. When employees don’t understand what kind of product the customer is looking for, or can not answer customer questions with the regard to the product or service, they could lead the customer to a product that doesn’t fit their needs. This positions the company as unreliable, undependable, and unaware of product offerings.
  • Lack of human touch or interaction – Chatbots is an excellent tool to proactively engage visitors, answer simple questions, offer customer self-service, route questions to the best agents, and collect feedback. But when they are implemented poorly, customers express concern around the lack of essential human touch from their service interactions.
  • Lack of personalization – One of the essential aspects of a positive customer experience is a personalized service. When customers see irrelevant information, they get a sense that customer service or sales reps use scripted interactions. Or, when customers are left to fend for themselves, they tend to feel less satisfied with their experience and less valued as a customer.

It’s also important to remember that it may take just one bad experience for a customer to write a negative review, share it with their friends and family, and completely leave you for the competitor. So providing the best customer experience you can throughout the customer journey is extremely important.

So why is customer experience neglected?

Given the importance of customers for businesses, it may seem surprising their experience is neglected at all, but there are many reasons why organizations end up falling short. Often, it comes down to one or more of the following reasons:


The customer experience is a mindset. And it often comes from the top. When business leaders do not instill the value of putting customers first and providing a consistently good experience across all touchpoints, chances are that this mindset will trickle down across all departments and levels of the organization.


The customer experience is a process. This process does not begin and end at the store, sales representatives, website, or call center. It extends from the moment the customer becomes aware of a company and may last until they leave for a competitor. When any one of the links in the process is weak or broken, it is likely to affect the entire customer experience initiative.


Marketers, salespeople, customer service reps, and partners all play an essential role in delivering a consistent, quality customer experience.

Products and services

Products and services must meet customer needs and expectations. With these things becoming increasingly more complex and connected, it is crucial to anticipate where the products may be difficult to use or fail for the user and address those gaps before they become customer issues.


The modern customer experience environment relies on technology to drive experience. Customer touchpoints and channels include physical stores, digital properties like websites, social media channels, ads, phone, email, text, chat, and even partner and other third-party review sites. If your company fails to provide customers with a consistent omnichannel experience, you miss the opportunity to connect with them on their terms.


Any information whether it is business-to-customer, employee-to-employee, or partners-to-customers plays an important role in customer experience. When information is inconsistent or simply does not exist, the customer experience suffers.


Customer experience strategy brings together all the activities, policies, and procedures aiming at providing a great customer experience into a coherent framework.

Wrapping up

It’s no coincidence that today’s most successful companies also have the most succinctly defined customer experience. Customer experience is the secret to business growth. It’s time to let the secret out!

Over the course of the next few posts, in this Customer Experience series, I will show you exactly how to identify customer experience gaps, create a winning customer experience strategy, and create a sustainable, long-lasting impact for your customers and your business.

David Hayden
Software entrepreneur who enjoys building products that empower business people to create and evolve enterprise applications without code.

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