Why Bad Customer Service Will
Bring a Company Down
Herbert M. Sancianco a Philippine-
based professional marketer honed as
a business educator, soft-skills trainer,
market researcher, brand strategist,
and a corporate rehabilitator with
over 40 years of experience. He is an
author of three business books on
sales promotion, customer service,
and corporate rehabilitation. He just
finished writing a fourth book on sales
and trade management for FMCG
products. He can be contacted at
marketingpilosopo@yahoo.com
© Business Expert Press 978-1-94897-623-7 (2018)
www.businessexpertpress.com
Herbert M. Sancianco
Abstract: Many companies, large and small, often w ­ onder
why their business is not doing well as they track their
sales performance that is slowly declining and reaching
a point where their financial condition is at a threatening
level. There are many factors of course that may cause
this, but among them is poor customer s­ ervice because
this is the most visible direct contact that a company has
with its customers. Service-oriented companies have this
as their highest vulnerability point and the single biggest
reason why they are not doing well.
Keywords: attention, availability, complaint
management, insensitivity, miscommunication,
opportunity loss, rapport, service speed
In the old days of the last millennium, the marketing
mix was focused on the 5Ps (Product, Place, Promotions,
Price, and People) as a company’s guide in ­developing
its business to its target market. Since many product
and service categories had a few players in each ­vying
for purchase attention from their demographic ­targets,
the ability of a marketer to move their brands and
­companies forward was somewhat manageable and very
­challenging in those days.
This is how the famous brand wars made headline
news since there were usually just two competitors
­slugging it out. Notably among them were Coca-Cola
versus P
­ epsi-Cola (cola wars), Colgate versus C­ lose-Up
(­toothpaste wars), Marlboro versus Philip Morris (­cigarette
wars), and Modess versus Kotex (sanitary ­ protection
wars). There are a lot more of course, and these wars pro-
duced many legendary marketers.
The consumer’s purchase decision in those days was
heavily influenced by a brand’s very visible advertising
and promotion programs. They took their cue on what
brand they should purchase, relative to the catchy adver-
tising visuals and later be a loyal customer from that alone.
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 Why Bad Customer Service Will Bring a Company Down

Brand switching often occurs when a All these pointed to the fact that the mar-
new brand enters the marketplace and chal- keter needs to now be customer-centered
lenges the market leader in its marketing in its marketing-strategy development.
game. Purchase and consumption trial were That is because, with the so many brand
always high since the marketplace was not choices visible at the retail display shelves,
yet a crowded one for the various brands the consumer has the power to determine
slugging it out to win customers from each which among the available brands will be
other or new ones who hadn’t yet been successful in the long term. Those who
­exposed to the product category at all. are unlikely favored will eventually have
The curiosity is often satisfied after the to bow out of the marketplace. The same
first consumption or use. The question, of condition applies to service-related brands.
course, is whether or not the target market So what are the customer service touch
was very satisfied with their user ­experience points that will make or break a brand to its
and can readily compare that e ­ xperience target market?
with their brand in use.
A very positive experience begs the next Availability
question of whether the brand in use will This is a problem that is always p ­ laguing
no longer be the brand of choice, or that a service provider or product supplier to
new brand will also be another one that its customers, a service supplier, and a
will be used alternating with the first brand ­product vendor.
already in use. When a favorite fast-moving product is
Market-research studies that I have con- out of stock or unavailable at the time of
ducted over the years have shown that a purchase intent, the retailer is making a
around 60 percent of those who tried a customer unhappy.
new brand and were more satisfied than Likewise, if a favorite bestselling dish
their incumbent brand will switch to the is not available to order in the restaurant
new brand. The remaining 40 percent will menu by a frequently dining guest, there is
now have two brands to use when there is a disappointment that is expressed. Some-
a need to do so. times, that loyal guest will stand up and
What was once an uncrowded product or walk out, and never to return.
service category soon evolved at the turn
of the century into a very crowded and
competitive one.
This phenomena made the marketer
work harder to differentiate their brand
from the other rival brands. However, the
experienced marketer like myself realized
that the consumer buying behavior was
generally evolving and dramatically chang-
ing relative to their lifestyle and the myriad
of product choices that were all screaming
the key words of “buy me.”
The marketing world examined this
closely and came up with a new market-
ing philosophy that set aside the 5Ps in
favor of the 5Cs. Product was replaced by
Customer, Place for Convenience, Price for
Cost, Promotion for Communication, and
People for Competence.

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 Why Bad Customer Service Will Bring a Company Down
Each time a customer falls out, a busi-
ness opportunity loss is created. In all like-
lihood, that unhappy customer will switch
over to a rival brand and eventually be
loyal to it.
The product-supplier and vendor or
­retailer has a shared responsibility in this
problem. Both will respectively feel the
­impact of the sales opportunity loss to their
financial bottom line.
A coffee and doughnut shop, for e
­ xample,
that does not frequently serve the hot cof-
fee that goes well with a doughnut, whether
taken as a morning or ­afternoon snack at
the shop, is a company on the way out.
The fault may lie with the coffee sup-
plier who, to begin with, had the coffee
variant and taste that the doughnut com-
pany favored to serve with their product.
The strong and sustainable business per-
formance and profitability shows that the
product matchup was absolutely correct.
And so if the doughnut company does
not want to belly-up so to speak, it must
find as soon as possible, an alternative
­coffee supplier.
In a very competitive product or service
category, the supplier and vendor cannot
take this problem for granted unless there
is a valid reason(s) why this frequently
occurs.
There are actually two key reasons why
this will happen.
The first can be the weak business rela-
tionship between parties, and the second
may be due to the unsavory payment hab-
its of the retailer which does not sit well
with the product supplier.
On the other hand, what is the pur-
chase psyche of the end consumer for this
problem?
Based on many research studies I have
formally conducted over the years for my
­ The same studies showed that less than
clients or as an academic assignment to my
graduate school students, the studies have
revealed almost the same results covering a
standard respondent panel of 100 individuals
who s­ atisfy the target demographic profile of
each study.
© Business Expert Press 978-1-94897-623-7 (2018)
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First of all, there are three buying con-
siderations that the end consumer makes,
should their favorite product brand be
­unavailable for sale at the time of a planned
or unplanned shopping trip.
a. Go to the next retail outlet to find out if
the product of interest is available.
b. Buy the next available brand at that very
moment.
c. Delay the purchase to the next shop-
ping trip.
Given these query points, the studies
have thus shown that:
1. Twenty-five percent are most likely g­ oing
to go to another nearby retail outlet to
see if the respondent’s favorite brand is
available there or not. If it is not avail-
able in that second store, the respondent
is prone to buy the next available brand.
2. Some 40 percent are most likely going
to wait and see if the product of inter-
est is going to be eventually available in
their next visit to their favorite retailer.
These are the very loyal customers of that
brand. Chances are that the shopper may
be making a planned purchase to eventually
replace a fully consumed product package.
3. The balance 35 percent are most likely
going to buy the next available brand
on the spot particularly if the product
of interest has a marginal competitive
advantage. The purchase decision to sud-
denly switch to another brand is most likely
due to the urgent need to use the product
within 24 hours.
Will those who bought the rival brand
switch back to the former non-available
brand?
half may return to their favorite brand if the
alternative brand is unable to deliver the
same if not better utilitarian experience.
The other half who will not return will make
that conscious decision to do so because the
rival brand gave a better usage experience.
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