Retention Departments Should Die


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Retention departments can be some of the worst cesspits of customer experience, and it’s not hard to see why. By definition, the role of a retention agent is to take a customer who has already decided to leave and make that customer not leave.

Rather than serving customers, a retention center tries to stymie the customers’ express wishes.

And when retention agents aren’t empowered to give customers what they want and are incentivized to maximize retention anyway, the result can be a toxic brew.

Witness, for example, the letter published in the Dallas Morning News from someone claiming to be an AT&T retention agent (which I heard about via Consumerist). The letter claims, among other things, that:

  • Each rep is given only allowed to offer a limited number of promotions per week, which are generally gone by the end of Monday.
  • Reps are expected to not only retain customers but upsell them, too.
  • The only way to meet retention quotas is to lie to customers and be a sleaze.
  • The culture promotes promising to do things for customers (such as cancel their service or provide a discount) and simply not doing it in order to meet retention targets.
  • Senior managers turn a blind eye to these practices.

AT&T’s response to these allegations is basically that they don’t know the writer is really an AT&T employee, and they train all their call center agents. Which is not really a response.

But to me, the claims seem entirely credible. I’ve heard of enough instances like this that none of the claims surprise me. The toxic combination of impossible retention targets, inadequate agent empowerment, aggressive accountability, and indifferent management is going to lead to problems every time.

This goes beyond just a bad experience. The reporter asked Daniel Lyons, a law professor with experience in telecommunications, to offer an opinion. Said Lyons, “if a company promises a customer incentives to either sign up for service or renew an existing contract and those incentives are not delivered, in many cases, that’s fraud.”

So what’s the alternative?

The key is that trying to increase market share by aggressive (or possibly even fraudulent) customer retention efforts is almost certainly counterproductive in the long run. That’s because today’s former customer might be tomorrow’s new customer, but customers who feel they were mistreated are far less likely to ever want to come back.

For proof, just look at the experience of the mobile phone industry in the U.S. when number portability was introduced in 2003. Suddenly it was much easier for customers to change carriers, but the mobile phone companies quickly adapted with new ways to reduce churn (like the much-hated two-year contract). In the end, customers could leave without talking to a retention specialist and the industry did just fine.

Customers have lots of reasons for wanting to take their business elsewhere: it’s not always about price. So if a customer wants (or needs) to leave, isn’t it better to make that a positive experience rather than a negative one?

Republished with author's permission from original post.

Peter Leppik
Peter U. Leppik is president and CEO of Vocalabs. He founded Vocal Laboratories Inc. in 2001 to apply scientific principles of data collection and analysis to the problem of improving customer service. Leppik has led efforts to measure, compare and publish customer service quality through third party, independent research. At Vocalabs, Leppik has assembled a team of professionals with deep expertise in survey methodology, data communications and data visualization to provide clients with best-in-class tools for improving customer service through real-time customer feedback.


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