Four Customer Service Mishaps that Can Break Your Back

At the startup and early expansion stage, customer service is often de-prioritized by founders and managers.

It’s a human capital-intensive and long-term focused initiative after all, and most startups live in the here and now. They spend much of their time on things like customer acquisition and product development, hoping customer service takes care of itself.

But what those management teams fail to realize is that one of their company’s primary competitive advantages over larger enterprises is the opportunity to develop intimate and long-lasting relationships with their customers.

Bigger companies, after all, typically fail to respond quickly and personably to customer issues. And when their customer service operation fails, it doesn’t take long (thanks to social media like Twitter and Facebook) for a public relations firestorm to ignite. Just look at how customer service mishaps impacted companies like Dell Computers and Delta Airlines.

In fact, poor customer service is one thing that can make bigger brands and corporations somewhat vulnerable to smaller competition. As RightNow’s 2010 Customer Experience Impact Report revealed, 82 percent of consumers will stop purchasing a companies products or services after an awful customer service experience. Those customers, of course, will look for a new company to satisfy their needs. And as a startup trying to compete with the big boys, that creates a unique opportunity.

But how can you take advantage if your customer service is lacking too?

Below are four specific customer service mishaps to avoid, each of which can break the back of your otherwise thriving company.

1. Launching a premature, incomplete, or untested product./h2>
There’s nothing that annoys customers more than being sold a bug-ridden or incomplete product. If you plan on doing an early release, make sure to limit the trial to a handful of handpicked “test customers” and let them know that the product is still in its testing trials.

2. Blaming customers for their own complaints.

Customers don’t like being blamed for a product’s problems, even if those problems are the result of user error. And it doesn’t take much for a frustrated customer to become an angry one. Even if a customer’s issue has nothing to do with your product, helping them resolve the problem quickly will improve customer experience and diffuse the situation.

3. Responding slowly or failing to acknowledge customer complaints.

There are few customer service sins that are worse than being unresponsive. The longer customers wait to have their issue addressed, the harder they will be to deal with and keep happy. Often times, a customer complaint can be simply addressed with a quick response. Even if you aren’t able to fix their problem right away, they’ll appreciate the engagement.

4. Providing an unfriendly customer atmosphere.

Customers hate rude and unhelpful customer service representatives. Even worse for businesses that fail to provide a satisfactory business experience, customers love to complain about those bad experiences via social media. Bank of America and United Airlines learned that the hard way.

While customer service mishaps like the ones I addressed above can cost huge corporations a lot of money and negatively impact their brand, they are rarely fatal.

Startups aren’t so lucky.

Customers rarely forget bad experiences and aren’t shy about recommending that friends and colleagues stay away from dubious companies. A couple bad customer service experiences can go viral and break the back of a young company as it’s just starting to get off the ground. That’s why customer service is so critical in the early stages of a company’s development.

Superior customer service can be a great sales tool (as Zappos proved in its rapid ascension in the online shoe marketplace), so it almost always pays to invest time and capital into developing an outstanding customer support group.

If you are interested in learning more about customer service and how it has changed in the social media age, check out my blog post on why Twitter should be used as a customer service medium. Similarly, if you are interested in learning more about CRM implementation and how to develop a first class customer service model, I highly recommend reading The Best Service is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs by Bill Price.

With so much to think about as a startup founder or manager, customer service is easy to forget about. But that’s a big mistake that you don’t want to make. Unless you want to end up on a list like MSN Money’s Customer Service Hall of Shame.