Here’s What a Single Unhappy Customer is Costing Your Business

Posted by Marketing Essentials on August 10, 2021 at 10:18 AM
Here’s What a Single Unhappy Customer is Costing Your Business

We all want our customers to stay with us forever... but life happens. Maybe the customer went out in search of a new restaurant or stylist to shake up their routine. Maybe they moved away. Or maybe they got turned off by a negative experience, bad press or demoralizing interaction with your customer service team. 

Every time a customer does business with you, they are making a choice. If you have provided them with a valuable product or service and an exceptional customer service experience with employees who care, the chances of retaining more of your customer’s business over time are much higher. 

However, customers are THREE TIMES more likely to tell their friends about a negative experience than a positive one. On average, it takes about TWELVE positive experiences with a business to make up for a single negative experience. 


Customers today are more connected and empowered than ever before. And that means unhappy customers (and even your employees) are also costing you more than ever before.

In fact, according to research conducted by Bright Local

  • 87% of consumers read online reviews for local businesses 
  • 72% of U.S .consumers have written a review for a local business 
  • 80% of people won’t buy from companies with negative reviews 

Here’s how much a single unhappy customer (or employee) might be costing your business: 

The Unhappy Customer that Cost United Airlines 180 Million

When his $3,500 guitar was broken by a United Airlines baggage handler and the airline refused to pay for repairs, musician David Caroll wrote a song about it. The title? “United Breaks Guitars.” The video quickly racked up over 14 million views. Four weeks after the release, the airline’s stock fell by 10%. 

Instead of paying $3,500 to replace the guitar, the airline lost 180 million in lost share value

The Single Star That Drives a 9% Drop in Revenue

In a study from Harvard Business School, restaurants that lose a single star in Yelp ratings could experience a 9% drop in annual revenue. 

This effect compounds, too. Consider that the difference in revenue between a restaurant with a 5-star rating and one with a 3-star rating could be nearly 20%.  Even worse, this effect is seen most often in independent restaurants as opposed to chains. 

Six-Figure Staffing Woes

Sometimes the negative reviews or experiences that impact your revenue are being shared from inside the house, too. Bad experiences shared by members of your own staff can impact your business’s bottom line, not only by turning off customers but by warning away potential new hires. 

According to a survey from CareerBuilder, 71% of workers will not apply to a company that receives bad reviews and negative press. What does it cost for you to hire and train employees? How much business do you lose when you’re understaffed? How does understaffing impact customer service? How many customers will you lose due to staff churn? 

A CAP study found that the cost of mid-range employee turnover was 20% of each lost employee’s salary. For skilled and highly paid staff at the senior level, it was even higher - up to 213% of an employee’s annual salary. 

Losing just four mid-range employees a year making $50,000 annually is costing you $40,000 a year or $200,000 over five years. That’s an entire extra employee! 

The Bottom Line

It can be five to 25 times more expensive to acquire a new customer than to retain an existing one.   This is why it makes more financial sense to put your time and resources into investing in the customers (and staff!) that you have instead of continually starting from scratch. 

Now it’s your turn: how much are unhappy customers costing your business? 

When your eyes have stopped watering, check out these tips for delighting, retaining, and upselling your current customers. 

Strategic Marketing, Remarkable Results

At Marketing Essentials, we’ve worked with hundreds of small business owners just like you to achieve remarkable results. If you’re struggling with reputation management or recruitment woes, we can help!