It seems odd, doesn’t it. EVERYONE, and I mean everyone talks about customer service, but complaints are everywhere. Why?
Customer service has long been seen as an OVERHEAD cost by companies, because for the most part it has been seen as something that happens after the sale. We are in the midst of a convergence where customer service is merging with marketing and sales, in addition to brand management, but that brings its own perils.
The thing to understand is that companies, by viewing customer service as overhead, tend to want to reduce the cost, the same way they want to reduce the cost of supplies, or hardware, or staff. At the same time they want to appear to be responsive to customers.
The gap between what it costs to provide the best conceivable customer service to a customer base, and the percent of profit and revenues companies want to pay is huge. That’s the bottom line and it almost always wins. In short, the major companies offer lipservice, and hope their service will be “just enough” to stay solid in their market.
And it is enough. That’s the other cause. Companies don’t HAVE to offer great service consistently to stay healthy. As an example, take a look at HP (do a search on twitter for HP customer service). You will find, every day, complaints about their product quality and their service, and largely they are ignored. But they still push product out their doors and into ours. Another example, Openx which is an open source software company with absolutely the worst customer service and support on the planet. Yet every day hundreds sign up to use their product and once locked in, the costs to change are often high enough to discourage abandonment.
Or look at Dell (like HP) or the darlings of customer service complaints — companies like Verizon.
None of these companies have collapsed as a result of their own conduct or the complaints of hundreds, perhaps thousands. One reason is that their ability to market results in much more powerful impacts on the marketplace than the complaints, even hundreds, even on social media platforms (we’ll explain that in further posts).
In short, HP doesn’t have to offer good product support if Dell doesn’t, and Dell doesn’t if HP doesn’t, and neither needs to if Gateway doesn’t, and well…Apple does what it wants, but mostly it’s better, but it’s niche. (Phew).
Summary:
- Companies see costs of customer service as overhead to be reduced (staff cut, outsourcing to the Arctic)
- Companies understand their own ability to affect perceptions is much stronger than any individuals complaining.
- Companies in the same “space” offer about the same customer service levels, which are very low. To operate at a level significantly higher than competitors so that customers will notice and there is a payoff, the company must vastly increase its customer service budgets and that comes out of profits, which affects shareholders….
- Companies know they don’t have to. GOOD ENOUGH is the watch word even if it is wretched!
In One Sentence
The reason we don’t and won’t see huge improvements in customer service is that it’s simply bad business (this is obviously oversimplified) for companies to do it!
Agree? Disagree? Let’s learn together. Maybe I’m wrong.
