Communication 101

The Total Economic Impact of Poor Communication

August 7, 2022
5 Min Read

Have you ever wondered how poor communication is affecting your business? Sure, you know that business communication is important for your team and organization to succeed. You know that delivering and absorbing messages is crucial to meeting your personal career goals. 

That said, you might be surprised by the total economic impact poor communication has in the workplace. Taking a step back to see all the factors involved can give you an accurate picture (and a new appreciation) of your company’s communication practices.

Below, Poised explains how poor communication impacts your team and sales strategy. 

How Does Poor Communication Impact Your Team? 

Bad communication can impact your team in many different ways. First, it can cause stress in the workplace. When your team members are not communicating effectively, everything feels urgent. No one has to tell you how difficult it is to perform productively when you feel overworked, tense, and rushed. Plus, it doesn’t leave much room for enjoyment or humor.

Poor communication can also negatively affect individuals' personal lives. When your employees and colleagues return home after a stressful work day, they’ll stay stressed and burned out while spending time with their families and friends. This can lead to many problems that eventually work their way back to the office and harm the bottom line.

Let’s touch on a few other total economic impacts:

How Much Can a Miscommunication Cost Your Team? 

Poor communication can disrupt the bottom line of both small and large businesses.

To start, businesses with fewer than 100 employees lost $420,000 on average annually, thanks to communication issues. 

Polling across the United States and the United Kingdom revealed that companies with over 100,000 workers lost $62.4 million annually due to poor communication. 

Luckily, there is an upside. Over a five-year span, companies that prioritized streamlined and successful communication practices saw a 47% higher return to shareholders

How Poor Communication Creates Conflict Between Team Members

Have you ever been reprimanded when the core issue was that no one communicated expectations for details effectively? Have you ever opened an email from your boss or colleague that read in an accusatory or demanding tone?

Ineffective communication inevitably causes tension and conflict among teams. Once a working relationship feels strained, you’re less likely to seek the individual out to find solutions and repair the relationship. Time passes, and the tension grows thicker. Don’t let that happen!

How Poorly-Written Emails Can Cost Your Team Money

You likely already know how poorly written emails can negatively impact your working relationships. But have you thought about the total economic impact they can have?

A single email can cause poor team performance and productivity. A misleading or grammatically incorrect email to customers can lower customer satisfaction, damage your company‘s reputation, and hinder people's trust in your brand. This can ultimately lead to a significant loss of revenue.

How Can Poor Communication Affect Sales?

Forrester Consulting conducted its first total economic impact (TEI) study more than 20 years ago. Businesses across industries have been using the TEI methodology to gauge how communication practices impact sales processes and results.

The Forrester TEI methodology can briefly be broken down into a few elements:

  • It outlines your organization’s initial challenges, requirements for solutions, and investment objectives.
  • It identifies quantified savings in productivity, database management, inventory, and ETL processes. It also reveals unqualified savings in infrastructure, maintenance, and insight.
  • Forrester's total economic impact then conducts a cost analysis of administrative, storage, and platform costs.
  • The financial summary includes your investment’s consolidated three-year ROI (adjusted for risk), net present value (NPV), and payback period. 

Poor Communication Can Ruin Your Sales Strategy

Substandard communication ultimately results in a negative economic impact for companies. You simply can’t maintain a fruitful sales strategy without executing effective communication across the board. Sales strategies require many moving parts, meaning you must constantly ensure team members and clients know what to expect.

Poor Communication Can Lead To Customer Disappointment 

Misleading or failing to communicate expectations can quickly cause customer disappointment. In this day and age, customers won’t think twice about taking their business to your competitors. It only takes one bad experience to lose loyalty.

Poor Communication Can Mislead Customers

A lack of communication often results in misleading customers, even when that’s the furthest thing from your intentions. Ensure you clearly communicate expectations, guidelines, and stipulations to avoid disengagement or dissatisfaction.

How Can Poised Help Your Team Communicate?

The Poised communication coach can take your team communication to new heights.

Here’s how:

Get Real-Time Feedback on Video Calls With Clients 

Our AI-powered communication coach monitors your performance in real-time and provides instant tips for improving your video calls. The other person on the call will not know you’re using the software.

Body language is important, sometimes even more important than the words we say. Professionals estimate that only 7% of communication is verbal (according to Dr. Albret Mehrabian’s 7-38-55 rule). However, body language can be tricky to self-monitor. What we may perceive as welcoming, others could possibly view as cold.

For an impartial view on this matter, rely on Poised to track non-verbal cues, including confidence and empathy. Empathy is a soft skill that translates into hard numbers. Empathetic management leads to increased levels of engagement (76%) and creativity (61%). Leaders who are perceived as unempathetic saw rates of 32% and 13% for engagement and creativity.

Poised can track perceptions of empathy through monitoring your posture, eye contact, movements, tone, and more. Then in real-time, it can discreetly offer suggestions to help you communicate empathy on video calls

Analyze Each Team Member’s Communication

Managers can use Poised to analyze each employee's communication performance during video calls and over time. It gives you hard evidence to use to encourage and guide your team members in delivering their messages more clearly, concisely, and confidently.

Build Your Team’s Confidence

All of us become more confident as we learn to communicate more effectively. Helping your employees sharpen their speaking, listening, and nonverbal skills will boost the team’s overall confidence.

One aspect that leads to a low perception of confidence is an excess of filler words. In a 2020 study, French researchers found that the overuse of filler words was linked to low perceptions of confidence

Poised can alert your team to filler word use, alerting people to a habit that many find hard to avoid, much less notice, on their own. This can help increase feelings of trust in each other and the client’s trust in your company.

Boost Your Team’s Communication Skills With Poised

Poised might be a relatively new company, but thousands of professionals in various industries are seeing big results. Take advantage of our real-time feedback, long-term analyses, and personalized training to improve your team's communication skills. You’ll quickly notice your company’s communication steering the total economic impact in the right direction.


The Effects of Poor Communication in Business | Chron

The Effects of Poor Writing Skills on Business | Bizfluent

Risk-Adjusted Return Definition | Investopedia

Forrester Research | Forbes

The Cost of Poor Communications | SHRM

Costs of Poor Communication Reach $37 Billion. Avoid Disconnects By Implementing These 2 Things | Inc

Strong Nonverbal Skills Matter Now More Than Ever In This "New Normal" | Forbes

Empathy is a business skill | LSE Business Review

How Confident Are You? Exploring the Role of Fillers in the Automatic Prediction of a Speaker's Confidence | Hal-Inria

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