Could 2013 Be the Year That Customer Service Gets Better?

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There’s nothing particularly new about the horrendous state of customer service. What is new is that maybe, just maybe, businesses will take steps to make customers happier this year.

Ask anyone for a story about bad customer service, and chances are you’ll get not one but a top 10 list of gripes. Confusing automated phone messages and long waits to speak to a live person have been commonplace for years, and it seems like everyone has a tale about encountering a particularly unhelpful or nasty service representative when a human being actually does get on the line.

Naturally, consumers aren’t pleased with the modern-day customer experience. A survey from 2010 indicated that 70% of consumers who had a problem with a product or service reported experiencing rage. A 2011 Consumer Reports study showed that 71% of customers were “tremendously annoyed” when they couldn’t reach a live customer service agent over the phone.

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To anyone who has been on the phone recently with their bank or cable company trying to get a problem fixed, none of this is likely to come as a surprise. What may seem surprising, however, is that business executives are only recently demonstrating some awareness that it may be a bad idea to expect customers to simply hand over their money and then never be heard from again. In a blog post listing predictions for businesses in 2013, the consulting firm Forrester states that it expects a renewed focus on improving the customer experience in the days ahead. Here’s why:

The idea that happy customers are more likely to remain loyal, try new products and services, and spread good news about their experiences has started to catch on. Over the past several months, we’ve seen a rise in the number of companies pondering the connection between enjoyment and metrics like satisfaction and Net Promoter Score (NPS).

After reading such a passage, the average consumer—someone who didn’t go to business school, never uses words like “metrics,” and wouldn’t know an NPS from NPR—probably reacts with thoughts along the lines of: Wait, why in the world would it be necessary for these concepts to “catch on”? Isn’t it fairly obvious that making customers happy would be, you know, good for business? Doesn’t everybody know that when customers are happy with a product or service, they tend to be loyal and probably mention their good experiences with others? Isn’t this especially the case in an era when people use social media and review sites to discuss every product they come into contact with and every little experience they have?

Apparently, in certain circles, such ideas are revelations. A while back, James Surowiecki of The New Yorker explained that because it’s difficult to measure the return on investment for improving customer service and the overall customer experience, many businesses don’t bother with much of an investment:

Customer service is a classic example of what businessmen call a “cost center”—a division that piles up expenses without bringing in revenue—and most companies see it as tangential to their core business, something they have to do rather than something they want to do. Although some unhappy customers complain, most don’t—one study suggests that only six per cent of dissatisfied customers file a complaint—and it’s tricky to quantify the impact of good service.

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Therefore, instead of constantly seeking ways to improve service, businesses often look for ways to decrease costs relating to service. Hence outsourcing, automated call centers, longer phone waits due to fewer service representatives, and so on.

Similarly, Michel Falcon, of the Falcon Consulting Group, recently wrote that CEOs are reluctant to spend to improve the customer experience because they can’t immediately see a return on investment:

What about customer experience? I believe the #1 reason some CEO’s won’t invest in customer strategies to support their experience is because the ROI of amazing customer service can take time to come to surface.

But in light of the success of companies like Amazon and Zappos—which score highly in customer satisfaction ratings—perhaps we are reaching the point when executives are willing to put more time, effort, and yes, money, into actually making customers happier.

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In a Fast Company post about New Year’s resolutions for brands, Adam Hanft calls for businesses to over-invest in customer service:

Customer service needs to be reinvented for a world where consumers are demanding more, where comparisons happen in real time, where loyalty is fleeting and there’s diminishing friction in changing brands. Customer service is where social starts.

My proposal for 2013 is that every CEO and CMO spend an hour a week listening in on some of their customer service calls. The result would be eye-opening–and a revolution in customer service, I assure you.

This recently published list of the 15 worst companies for customer service—which is based on data from the American Customer Satisfaction Index and unsurprisingly features a disproportionally large number of airlines, banks, and cable and telecom companies—is a good place for the revolution to start.

13 comments
cmorales
cmorales

I sure hope so. Companies have to realize that the "old school" mindsent of offering great producs and nothing more is just that--old. Consumers now have the power in their hands--with such tools as Facebook as a venue to let the world know what's not good about their cable company's poor service (if you could call it "service" to begin with). So with this in mind, companies, beware. We, the consumers are on to you.


Kyle_Dover
Kyle_Dover

The easiest way to understand the problem with customer service is to look at a carnival.  In the colorful vernacular of carny, people aren't customers, they're marks.  The reason marks exist is to cough up cash!  Most companies don't want customers, they want marks.

And your list of worst industries - airlines, banks, and cable and telecom - is no surprise either.  These industries are notorious for either having no relevant competition (airlines and cable) or offering exactly the same products (banks and telecom).  In short, the marks, uh...customers have few if any real choices and the companies have little incentive to change their approach.

Finally, true customer service is personal, and it requires employees to make situational decisions about a customer's experience, interests, and concerns.  Unfortunately, most companies don't want their employees to have any more discretion than their customers.

As long as companies are permitted to run the carnival (especially in Congress) we should expect to be treated like marks.

CntactSolutions
CntactSolutions

It seems counterintuitive, but you are right-on that many companies have neglected customer service until now. At Contact Solutions, we just conducted a survey that found 48.1% of respondents share bad customer service experiences on social media, and 47.5% share good experiences using the same social channels. What does this show? People are not only demanding good service, but they are going to tell their networks if/when they get it, but also if/when they don't. As social media continues to become ingrained in our culture of today, it is imperative that executives quit hiding from the fact that we are now living in a consumer-centric world.

Justin Lemrow, Contact Solutions

RandiBusse
RandiBusse

Companies can no longer ignore customer service and look at improving it as a cost rather than an investment.  They are losing customers every day and they often don't even know it.  Customers are more powerful than ever before and able to bring a company to its' knees very quickly.  If you are reactive to a bad customer service situation rather than being proactive by providing outstanding customer service, you run the risk of not only losing the customer, but also losing your reputation.  

The premise of spending money to make money certainly applies here.  Make an investment in your organization and your people by providing them with customer service training and you will see your revenue, retention, reputation and referrals soar.

ron.arad
ron.arad

Brad, I think that part of the change will take place when we work to change the way the customer service process is designed. I personally decided to build my start-up to change the process. From "write us", "call us" and "email us" the process asks you the customer to invest time. The effort that exist today in the customer service process has to change. Social media is not a tool for customer service , but it is effortless. We took the DNA of social media and built a new way for customer service.

ShepHyken
ShepHyken

I am amazed that more companies aren’t putting the focus on customer service that they should.  I’m fortunate, because in my world, I get to hang around some of the greatest customer service companies on the planet.  They know why it’s important to deliver a great customer service experience.  They know the customer-centric culture starts at the top and includes every employee.  There is plenty of information here, both in statistics and suggestions, that any company can do to help make 2013 the year that customer service gets better.

verygoodservice
verygoodservice

Very Good article, highlighting the key challenge of measuring ROI before being convinced that an investment in customer service will pay off. It is also useful to add two dimensions, one being employees as happy employees will offer a better service and some of the metrics to measure employee satisfaction are relevant for customer service. The other one is the emergence of social media. In effect, good customer service provides the tools to avoid uncontrollable negative reputation risk if the social media crowd takes hold of a bad service issue and decides to run with it. The ripple effect can be very significant. Encouragingly, more people are becoming fair in their judgement and if a company dedicated appropriate resources to resolve an issue, they will receive very favourable reviews and what look initially like a problem can become a source of good publicity.

JohnForsthoffer
JohnForsthoffer

Obviously the big business's don't care about giving the best customer service. And when they do offer customer service, they hire idiots who could care less about their jobs let alone providing good customer service.  Do you know where to get great customer service? Small mom & pop business's. 

MichelFalcon
MichelFalcon

Adam-

This is a great post and perfectly timed as we begin the year. Although the awareness of customer experience continues to received attention at the executive level we are still not where we need to be. Positively speaking, we still continue to see organizations be influenced by the financial and media success of some of the trail blazers (Westjet, Zappos, Amazon). 

rbacal
rbacal

@CntactSolutions Not to be too contrarian on this one, but there are some problems with using survey data and assuming the responses accurately reflect actual consumer behavior. That's why the systems for TV ratings, for example, don't rely only on self-reports, because they are inaccurate. The second issue here is that while SOME percentage of people actually DO "spread the word" on social media, the number of people who a) actually read the negative comments b) actually remember the negative comments and c) actually act on those negative comments are much lower than people think.

rbacal
rbacal

@ShepHyken Shep, I know you are amazed that they aren't, but the reason is that it doesn't pay off for most companies. A very few companies benefit from being best in breed for customer service. That doesn't actually mean that ALL companies will. In fact, they won't. Customer service is a business tool -- that is it is subservient to business goals, and upping the customer service game simply does NOT always result in better business results. If customer service was so important to business survival, a lot of very profitable companies (you know, the ones that almost every year are rated as worst customer service companies, would have gone bankrupt years ago).

ShepHyken
ShepHyken

@rbacal Good points. The best companies don't just want to get by. Good enough is not really good enough. The customer's expectations are changing. Companies don't get compared to their industry competition any more. They are compared to the last place the customer did business. I go to Starbucks where they know me by name. The next place I visit is a disappointment because they don't know my name. There will always be companies who don't get it and survive. Those companies are missing opportunities to be more successful. 

rbacal
rbacal

@ShepHyken @rbacal Shep I know that we probably disagree fundamentally on a lot of customer service issues, and that's fine. Some of what you said above, I'm not sure about. The reason is that so many companies are doing so well despite the fact that their customer service is...well, terrible. Without having some explanations about why so many companies are hugely profitable while at the same time ending up on the worst customer service lists, year after year, I have to reserve judgment.

On the "good enough is not really good enough". I DO disagree. I'm playing around with that concept, and using the term: "Just Good Enough Customer Service" (JGEC), which I've started explaining at: http://angrycustomer.org/faq/index.php?action=artikel&cat=18&id=60&artlang=en

And to add, Shep, I often find that customer service advisors such as yourself often use examples from their own experience and extrapolate. I think we need to separate ourselves and look at things from BOTH a customer perspective, and a business strategy perspective.