What Loss Will a Business Suffer Due to a Dissatisfied Customer?

What Loss Will a Business Suffer Due to a Dissatisfied Customer?

By Discovery Lean Six Sigma

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Guest post by John Hunter, who founded curiouscat.com in 1996.

You can’t know how much a dissatisfied customer will cost your business in the long run. You can make statistical judgements about how costly dissatisfied customers are to a business but those are loaded with many guesses. They can give a general indication of the magnitude of the costs but they are largely guesses, not something you can measure.

graphic for Dr. Deming quote: 'no one can guess the future loss of business from a dissatisfied customer. The cost to replace a defective item on the production line is fairly easy to estimate, but the cost of a defective item that goes out to a customer defies measure.'https://blog.deming.org/wp-content/uploads/2018/06/no-one-can-measure-10096-2-300x188.png 300w" sizes="(max-width: 640px) 100vw, 640px">

Sometimes a business largely gets away poor quality for a long time. The customer doesn’t change behavior, doesn’t complain to others and doesn’t punish the company in the long term. But you never know when one small failure will cause the luck to run out and turn a customer against the business and costing it dearly.

I may finally escape the incumbent monopolistic internet service providers that most of us in the USA must put up with (because we often have no real options). I recently moved into a house that can get Google Fiber. For a long time I just had to accept the poor treatment at the hands of whoever I had to rely on for internet service. Now I have a choice and I am very happy to get a chance to escape companies that have mistreaded me for decades. When your customers are wishing they could flee they may still have to wait until they know of an alternative.

Very dissatisfied customers may be actively seeking alternatives. But there is no way to know when a competitor like Google Fiber (or Ting Fiber or other companies that are seeking to lure away long mistreated customers) will enter the market. And even when they do you might get lucky and they will cut back on plans to expand (as Google Fiber has done). The loss a business will suffer from dissatisfied customers can’t be known. A large inventory of dissatisfied customers is certainly a big risk to the businesses future, but how big a risk is unknown.

Related: Unknown and Unknowable DataCreating a Deep Commitment to Delighting CustomersMyth: If You Can’t Measure It, You Can’t Manage ItCustomer Delight




Original: https://blog.deming.org/2018/06/what-loss-will-a-business-suffer-due-to-a-dissatisfied-customer/
By: John Hunter
Posted: June 29, 2018, 2:33 am

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