Why the retail service industry is losing customers

Service industry positions are essential to your brand because good service industry employees retain customers and extract more value from them. By providing top-notch customer service, businesses recoup customer acquisition costs and cultivate a loyal following that refers to customers, serves as case studies, and provides testimonials and reviews. Still, not many brands are learning that lesson.

Robert was pissed off. Delta had just canceled his flight, and now he would miss his international connection. When he called Delta, he was put on hold for over ten minutes, and the Delta customer service representative told him to “calm down,” which made him even angrier. His story is not unique.

While a vast majority of brands are reporting record profits, it seems they forget more money in customer service. Customers get angry when dealing with phone trees and online bots that don’t answer their issues or questions.

Unfortunately, the hot job market has meant that not many people want to work in customer service or retail helping customers. Even paying $15.00 an hour, many retailers are finding it hard to hire people who want to work with consumers who are, by all accounts, angry at just about everything.

Service industry jobs are especially being hard hit. In some country areas, it’s almost impossible to get cleaning services or contractors to call you back about potential careers. Working in the service industry has always come with a plateful of shut-up-and-take-it: Late nights, missed birthdays, rare paid time off, scarce health insurance, demanding customers, and low pay. 

During the pandemic reshuffling, jobs that require in-person attendance and traditionally have lower wages have had a more difficult time retaining workers. For example, the leisure and hospitality, and retail industries have had the highest quit rates since November 2020, consistently above 4.5 percent.

But at the same time, the hiring rate has been even higher. Leisure and hospitality lost 1 million workers in November 2021, but 1.2 million people were hired into the industry that same month. Leisure and hospitality have maintained the highest hiring rate of all sectors since November 2020, at 8.1 percent. This is compared to the national hiring rate of 4.4 percent.

According to a survey of 1,100 companies by Goldman Sachs 10,000 Small Business Voices, hiring and retaining employees remains the top challenge for service businesses. Ninety percent of hiring companies are finding it difficult to recruit qualified candidates for open positions.

When a customer is angry because of poor customer service or service, they remember the brand/store, not the person. A customer who receives terrible service is not likely to return to that retailer or restaurant.

It’s not the money keeping potential employees away; it’s the job itself. Employees don’t want to work in the service industry even at $20.00 an hour. Most fast-food restaurants are stacked with immigrants willing to work carry-out windows while others are not.

Brands that rely on customer service and service industry jobs had better invest in their people and find ways to retain them, or else their marketing isn’t going to work.

Why the retail service industry is losing customers

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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