Bad Service Costs Money, Good Service Earns It

Many companies are preoccupied with the high cost of offering good service. They see the expense of field engineers, spare parts inventory, and support systems as a drain on profitability. This view is shortsighted and fundamentally wrong.

It is bad service that costs companies money. Good service earns it.

The Economics of Service:

• The Cost of Bad Service: Bad service leads directly to lost customers, damaged reputation, and lost market share. The cost of losing a customer is always higher than the cost of keeping them.
• The Return on Good Service: Good service is an investment that pays significant dividends:
  • Customer Loyalty: Satisfied customers become repeat customers.
  • Premium Pricing: Customers will pay a premium for reliable suppliers who they trust to ensure their success.
  • New Revenue Streams: Customers will purchase maintenance contracts and other service products from a supplier they trust.
  • Competitive Advantage: Good service is a powerful differentiator that wins purchase orders away from competitors.

The fundamental purpose of a business is to serve customers. Since few customers can get the full value from a complex product without good service, providing that service is not a cost center; it is the core of the business. In the end, good service more than earns its way.