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How Much is Poor Customer Service Costing You?

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Upset customers. Missed sales opportunities. Unfilled orders.

Can you really quantify how much service problems like these cost your staffing firm?


To find out how much poor customer service costs you, determine how much a client is worth to your business throughout its lifetime.  Entrepreneur.com recently laid out a simple formula to help you attach a dollars-and-cents “lifetime value” to your clients:

(Average Value of a Sale) x (Number of Annual Transactions) x (Average Retention Time for a Typical Client)

Using this formula, the lifetime value of a single staffing customer could easily reach hundreds of thousands of dollars – or more!

One of the most effective ways to increase that “lifetime value” is by increasing your Average Retention Time -and that starts with understanding why clients leave you.  Contact a few of your former best clients and ask them why they’re no longer your customers.  Their candid feedback may help you identify systemic problems with your service that can be corrected.  In some cases, you may even be able to win back their business.

Here are a few more ideas for increasing client retention (and lowering the cost of poor customer service):

  • Create a service “report card” for your company.  Call your customers and ask: “How are we doing?”  Their answers will help you determine whether or not you’re meeting their expectations.
  • Monitor your best clients’ behavior.  Be ready to intervene if their recruiting or staffing usage slips significantly – before minor issues become major problems.
  • Develop internal customer service champions.  Meet with all departments in your company to make sure every employee understands, and takes ownership for, the value your staffing service offers.
  • Hold a shareworthy service idea-generating contest.  Create a little excitement about customer service.  Involve your staff and ask them for new ways your company can improve client relationships and keep your customers happy. Consider making this idea-generation a “contest” among your staff.
  • Create customer service metrics in performance reviews.  When evaluating employees, work together to identify ways of measuring and tracking great customer service.

Bottom line?  Never underestimate the true value of the word “service” in the term “staffing service.”

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