Thought Leadership

“Passive Employees” Hurt Customer Service and Cost Businesses Thousands

If your employees fail to speak up when fellow workers treat customers poorly, it could cost your organization big money.

VitalSmarts – Employees Are Letting Customer Service Slip–And It Costs Businesses Big on the dollar cost of  “passive employees”– those who choose to look the other way when another employee fails to deliver good customer service. VitalSmarts says these types of incidents cost businesses an average of $54,000 a year, not to mention those customers who never return or who tell others not to do business with you.

The study, conducted by Joseph Grenny and David Maxfield (authors of Crucial Accountability), yielded some interesting results. Sixty-six percent of employees who witness poor customer service are in a position to assist in resolving the problem, yet only 7% will take action.

An employee will witness 19 poor customer-service events each year resulting in a 17% drop in revenue for each customer. Among B2C customers, 75% believe subpar service negatively affects the business they do with the firm by over 50%. B2B customers remarked that these experiences negatively influence the business by 42%.

“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.”

The study indicates that the issue is about motivation, and notability. The majority of employees can solve the customer’s problem but choose to refrain from getting involved.

On the plus side, the researchers found that these losses can be recuperated by empowering employees to address these incidents. Grenny and Maxfield suggest several tips for employees who witness poor customer service:

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