Improving Customer Service Can Make You More Money

Improving Customer Service Can Make You More Money
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Remember the "old days" when you could buy a product and count on competent service after purchase? Doesn't it seem that those days are long gone? Instead of customer service, most customers get lip service. And, what comes out of those lips are insincere clichés that "customer service" reps must have learned in some inadequate customer-service training program.

Typical Hurdles

It is unfortunate that customers can predict the obstacles they'll encounter as they search for solutions to their problems. A typical set of hurdles is summarized below.

  1. Recording maze. When you first call for service, you are likely to hear a message that goes something like this, "Thank you for calling. Please listen to all options since our menu has recently changed." Of course, if you are lucky, you will make it through the endless menu and submenu choices with your sanity in tact. If you are even luckier, you will be spared additional indignities that include: (1) making the "wrong" selection and getting routed to the beginning, (2) getting bounced out of the call or disconnected, (3) being told that the office is closed and that you should call back during regular business hours, (4) waiting for what seems to be an eternity, and (5) getting Attila the Hun, Beavis and Butthead, or Dumb and Dumber as your customer service reps.
  2. Insincere clichés. If you survived the recordings and long waits, you are grateful to finally get a human voice - even if it is Attila the Hun. Then comes the big letdown. Because the company you called has not invested much in the reps or their training, you are likely to get one that doesn't listen, asks you to repeat yourself several times, and really does not care about helping you. After you tell this person your problem, they typically spout perhaps the most annoying cliché insincerely delivered that rubs salt into your wounds – "I apologize for the inconvenience."
  3. Running interference. After a few minutes, you realize that this rep is not there to help but to run interference and protect the more qualified reps (called supervisors or managers). They send you on "wild goose chases" – having you unplug and reset things, push buttons, run through diagnostics, and jump through more hoops that you have already done before you embarked on the painful process of calling them in the first place.
  4. False hope. If you successfully make it through the annoying obstacles and you are lucky, you might actually hear the magic words – “I am going to escalate this.” These are code words for "now we are going to finally do something to try to help you." They typically give you a case number to which you can refer, and they tell you that you can call any time and give whoever answers the case number. What they fail to say is that you will encounter the same phone interference when you call back. In rare cases, they will give you a direct number, but you usually have to beg for it if one is available.
  5. Send-off. After all this, you are not done. They waste more of your time by making you listen to their insincerely scripted final remarks that go something such as... "Is there anything else I can do for you today? Thanks for calling XYZ Corp where we delight in giving our customers the very best customer service."

What customers think

Customers are not happy with existing levels of service. According to Consumer Reports, the largest cable giants appear near the bottom of the customer service rankings in a comprehensive survey of users of TV, Internet and phone plans. Too often, these companies justify declining customer service on the basis of the lower prices buyers are willing to pay. That's right. They blame us. The fact is that governments have given them monopolies to treat us so badly.

Consumers are paying more and more for less and less

However, if you peel back the layers of the onion, you find the service providers are getting more and more of our wallets. As quoted in Bloomberg by author Scott Moritz, Glenn Derene, electronics editor of Consumer Reports, says...

"Everything else in consumer technology is getting more affordable every year – everything except communications services... The rate of cable price increases more than doubled the rate of inflation in the 15 years through 2012."

You can't even cancel

Comcast customers, Aaron Spain and Tim Davis, made big splashes in the news media by video taping their customer service experiences with Comcast and sharing them on YouTube. Their videos went viral, and the PR damage to the company far outweighed the drop in the bucket Comcast received from keeping them on their customer list a bit longer.

Prospects get courted as customers get slammed

Of course, all the companies vying for your communications and entertainment business are great at offering deals to lure you to sign up with them. Once you become a customer, however, they slam the door in your face by changing your plan, increasing your price, and lowering the level of service when you need help. Some would call this the old bait and switch. They don't understand the relationship between trust and profits.

The cable companies are not alone

In April of 2011, as a result of a whistleblower lawsuit over allegations that Verizon overcharged the federal government for voice and data communication services as well as hidden surcharges, Verizon agreed to pay the federal government $93.5 million. This followed an FCC investigation into "mystery fees." Verizon charged 15 million cell phone customers for accidental Web access and data use charges. In October of 2010, Verizon agreed to $90 million in refunds to head off litigation with the FCC and numerous class action lawyers. Several Months later they were slapped with a class action lawsuit for charging customers hidden "Get It Now" fees.

Poor customer service across too many industries

While telecom and cable companies are near the bottom of the list on customer service, they have a lot of company. In his book entitled Total Customer Service William Davidow says, "Service is poor in many service industries, abominable in many retail stores, and totally ignored in many technology companies."

An Accenture strategy study says...

"Some 53% of US customers surveyed last year reported having switched providers during the prior year due to poor service."

Appliance manufacturers and related repair companies also have incurred the wrath of their customers. Whirlpool, which makes lots of appliances under their own and other brand names, has a one-star rating on Yelp (as of this writing). One star. Many say they would give them 0 stars if that were a choice. Even though it is often painful to change or switch, it is more painful to be on the receiving end of products that don't work as represented and poor customer service.

A video capturing the mistreatment of a customer by United Airlines after it overbooked a flight has gone viral worldwide and created untold damage to the carrier and its reputation. Many believe their competitors are not much better – routinely overbooking flights, charging for numerous services that were formerly included in the fare, and treating economy customers as if they are doing them favors for taking their money and allowing them on the plane.

Understanding the Lifetime value of a customer

Too bad that companies providing poor customer service don't understand the Lifetime Value of a customer. If they did, they would take better care of their existing customers rather than focus on acquiring new ones. They would do a better job of training customer service people who routinely "play dumb" during an outage or are rude to subscribers calling for service. They would not make it so difficult for customers to get credits for defective products, outages, and other problems, and they would not need to play games with customers that want to cancel. The executives in these companies should understand that they exist and prosper because they satisfy the needs of their customers. If they think that their current domination will continue, they don't understand the disruptive potential of great competitors.

What companies can and should do

If companies take care of customers, the money will follow. If they chase after the money by cutting customer service quality or charging for previously included items, they will end up losing the customers, their wallets, and their referral pyramids. Most important of all, they will lose the trust of the marketplace. Once they lose public trust, it is hard to get it back. Even if their marketing campaigns are exceptional (which they rarely are), they will not work unless the customer service component of their products is significantly improved and prices are in line with what buyers are willing to pay.

Why you should do it

Your company should invest in customer service for lots of reasons. Two of the most important are...

  1. You have no choice. In an era of social media and viral real-time, word-of-mouth pyramids, you have no choice. If you don’t properly service your customers, better competitors will emerge to take your business away.
  2. Big ROI. You'll get a big return because the known definitive studies done by Marriott, TARP, PIMS, and Opinion Research confirm the relationship between better customer service and bigger profits.

Lip Service versus Customer Service

If your customer service is based on lip service, it may cost you less in the short run, but you will lose the future. If you invest in bona fide customer service that makes your customers and employees happy, you will not only make more money, your company is likely to be successful over a much longer period of time. The choice is yours. Best of luck.

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