The quality of customer service has been steadily declining in recent years, but now that increasing digitisation has shifted more power to the consumer. Christopher Surdak demonstrates that bad service can, and will, become detrimental to companies.
If you’re like me, over the last decade you have noticed a consistent and rather dramatic decline in customer service from a wide range of businesses with which you interact. Decades of relentless cost-cutting, outsourcing and right sizing have all conspired to devalue customers, and the employees who interact with them. For some time now businesses have been rewarded for maintaining a scarcity mentality, whereby customer service has been sacrificed at the altar of “good enough is too much.” This trend towards devaluing customer service is now colliding head-on with customers’ growing expectations of instant gratification, operational perfection and what’s-in-it-for-me. These expectations are a direct result of the “appification” of their daily lives, where their every whim can be met through exceedingly clever apps, downloaded in seconds, for free, on their smart phones.
Organisations who continue to pursue a scarcity strategy now face a range of dangers, and the stakes have never been higher. Cloudification, Mobility and Social Media are conspiring to pull the commercial rug out from underneath such companies and their “race to the bottom” business models.
Outsourcing, Cost Reduction and the Scarcity Mentality
One of the consistent themes in global business over the last two decades has been a relentless assault on costs. A great many organisations have pursued a scarcity mentality, whereby they seek to eliminate any cost possible in every aspect of their operations in order to remain competitive.
This strategy, coupled with substantial increases in per capita productivity, largely driven by advances in information technology, has lifted the global living standard by a substantial amount. Indeed, between 1990 and 2010 the global population living in extreme poverty fell from 1.9 billion to 1.2 billion people.1 From this perspective a scarcity mentality appears to be a good thing, as quantitatively we seem to be living a better life. However, these cost-cutting measures rarely take into account the qualitative aspects of what you and I receive as consumers.
In many companies the single largest variable cost is labour. Hiring and managing a workforce is an expensive undertaking, and incremental reductions add up to significant savings. As a result, many organisations work to cut labour costs.
In the mid-1990s the outsourcing craze began in earnest. Global connectivity to the internet and low-cost international telephone calls allowed organisations to leverage much lower labour costs available in nations such as India, China, Malaysia and The Philippines. The difference in salaries between labour in developed countries and developing countries was vast. While connecting these populations to global networks was expensive, this cost paled in comparison to the savings that were available in leveraging income inequalities.
As a result, between 1992 and 2012 the United States alone saw the loss of nearly 29 million jobs which were outsourced to lower cost markets.2 While these massive shifts of labour did reduce costs globally, and accelerated development in emerging nations, for many it soon became clear that labour was not quite as fungible as everyone seemed to believe.
The Western Front of Customer Service: Clerks, Representatives and Salespeople
Whether outsourced or insourced, off-shored or re-shored the trend of paying less for labour inputs has taken a firm hold in most global organisations. The result of this trend is that organisations are simply paying less to staff in those roles believed to be less important. Organisations seek to hire those employees who are willing to accept lower pay, and this generally means that those hired are less qualified, motivated and educated than those who expect higher pay.
As a result, those who accept lower wages in these roles are not trusted with a great deal of authority or responsibility. They work inside of policy, process and reporting structures that limit their authority to act, as they are merely seen as vehicles for executing those structures. If many of today’s jobs feel somewhat de-humanising and unsatisfying, it is because they have been designed to be so. When an organisation hires with a scarcity mentality, the resulting lack of skill, motivation and drive in employees must be managed.
It is troubling that many of the roles that have been most drastically affected by this trend are those with the greatest interaction with customers. Clerks, customer service representatives and salespeople are being paid less and less, and are given ever-shrinking ability to actually perform their jobs. Whether their role is outsourced to a service center thousands of miles away, or staffed locally by someone willing to accept lower pay, people on the front-lines of customer interaction are no longer trusted to do the right thing, and are taught processes and procedures that take away their ability to do very much beyond delivering a forced greeting.
“I Can’t Help You”
This purposeful disablement of customer-facing employees has led to the ultimately fatal trend of telling customers, “I can’t help you.” I hear this on a daily basis, and am growing increasingly weary of it. Another variation is, “That’s just our process,” or “That’s just our policy.” The policies and processes implemented by many firms discourage problem solving by their employees. Scarcity has built an expectation that low-wage employees cannot be trusted to make decisions, and so they can’t and don’t.
The upswing of this is that we as customers are forced to accept an ever-diminished experience in our interactions with organisations that serve us. While we might enjoy the quantitative benefits of high-productivity and low costs, we also suffer an enormous qualitative loss in how we obtain those benefits.
The Customer Strikes Back
It seems that many organisations have chosen to live with a certain degree of customer malaise because their customers have allowed them to get away with delivering terrible service, we have surrendered our qualitative expectations in return for greater quantitative benefits. However, it would seem that this trend is reversing, and is doing so in a rapid and comprehensive manner.
Our technology has been advancing at an accelerating rate, and consumers’ appetite for these technologies has been voracious. The powerful combination of smartphones, apps and social media is leading to expectations of instant gratification, a process I call appification. By late 2014, you and I as consumers will be so appified that if it takes more than 30 seconds, and more than one euro, pound, or dollar (et cetera) to fulfill our need, we simply go elsewhere. Appification has left us completely intolerant of poor performance, inefficiency, or delay.
Appification also means that you and I have an expectation of perfection. I expect everything I use in my world to work correctly the first time, every time. If you are providing me with a product or service you receive no credit for merely meeting my expectations. Conversely, if you fail to meet my expectations, I have absolutely no tolerance for your failure and will immediately abandon your product or service in search of gratification elsewhere.
In a world where there are millions of apps available for instant download customers no longer face any meaningful switching costs. As a result, our previous need to choose either quantitative benefits or qualitative benefits from our suppliers has come to an end. Today, customers expect both, and will not readily settle for less.
The Disablement Disaster
Recently I had an experience with which nearly everyone can identify. I had purchased an enlargement of a digital photo. I conveniently placed my order online, and arranged for in-store delivery. When I arrived at the store it was immediately obvious the job was performed incorrectly. Rather than using the high-resolution file that I had sent, the employee who made the enlargement somehow reduced the file size, leading to a poster that was blurry, and ultimately worthless for my purposes (a gift). Nevertheless, this particular employee apparently shrugged their shoulders, placed the poster in a box, and shipped it off.
It took me an hour to arrange for the poster to be re-created at the store and this time the photo was properly enlarged. However, at this point the clerk performing the enlargement noticed that the photo was copyrighted to the photographer. The clerk asked me for the release from the photographer which I had on my smartphone. Unfortunately, the clerk refused to accept this electronic release, telling me “that’s just our policy,” and “I can’t help you.”
Needless to say, I was unimpressed. I sensed the opportunity to capture an interesting example for this very article, so I pursued the issue further. Rather than relent to this clerk’s disablement, I escalated. Two hours later, I had worked my way through four layers of supervisors, each of which reiterated these same sorry phrases, “that’s just our policy,” and “I can’t help you.”
Throughout this ordeal I was posting about my experience on various social media platforms sharing with the world at large my dissatisfaction with this total lack of customer service. Ironically, once the store manager capitulated and accepted the digital photographer’s release, the clerk who originally served me handed me a further release form to sign. I said to him, “If I had signed this release two hours ago, would you have let me take my photo?” He replied, “yes.” I then asked, “Why didn’t you tell me that two hours ago?” “I didn’t think of it then,” was his response.
Dangers of the Connected Consumer
Herein lies the danger of employee disablement: organisations who have purposefully devalued their customer service in the name of cost savings are now delivering terrible service at precisely the time that their customers no longer have any patience for this, and at the time when they can actually do something about it. With instant access to the global community of consumers through social and mobile technologies, each customer service failure can be blown dramatically out of proportion. This can cause extreme damage to a company’s brand, dissuade future purchases of the service in question, and ultimately means that power is being put back into the hands of consumers. We can now expect both quantitative AND qualitative benefits in our purchases, and if we don’t get them we immediately buy from someone else, but not before leaving an aggrieved Parthian shot on Facebook or Twitter.
Deliver or Die
Too tired to argue, I wandered up to my room and prepared to purchase a bag of crisps from the vending machine down the hall. Moments later I received a call from this same receptionist asking me if I could select an item from the room service menu and she would see to it that I received it as soon as possible. I made a selection and, surprisingly, she appeared at my door fifteen minutes later with a sandwich and soft drink. I broke through my speechlessness long enough to thank her, and had a satisfying meal.
I am quite certain that that receptionist broke several rules, policies and processes in fulfilling my need at that moment, and this is precisely why she deserves kudos in this article. She took it upon herself to fix my problem, regardless of the rules that might have dictated otherwise. As an appified consumer with no patience and infinite choices, it is this sort of behaviour that defines my new definition of quality. To impress me and keep me as a customer it is not enough to deliver perfection. Rather, it is how you respond when something goes wrong (and things will often go wrong), that determines if you have delivered a quality experience.
Because of that experience, I now go out of my way to stay with that hotel chain in my frequent travels, and I tell people about that experience at every opportunity. Cheapness-through-scarcity may have been a superb strategy to remain competitive over the last twenty years. However, the social/mobile revolution has completely changed the competitive landscape, and consumers are no longer willing, or required, to accept terrible customer service in order to have their quantitative needs met. Over the coming decade, disablement of customer-facing employees is a losing strategy, and organisations who do not adapt to this reality will likely be ostracised, penalised and then marginalised in rapid succession.
A Strategy of Delight
So what should organisations do in light of this shift in consumer power? First and foremost, drive authority and responsibility for decision-making as close to your customer as possible. If someone is not authorised to make a decision on behalf of a customer, they should not be interacting with customers. This may mean fundamentally changing your business processes and hiring practices, but it is imperative nonetheless. Every customer that interacts with your employees has a trigger finger on the “send” button of their favorite social platform, and the slightest delay in meeting their needs could cause a maelstrom of negative publicity.
Third, look for reward and celebrate those employees who do provide exceptional service to customers regardless of whether or not they were authorised to do so. My hotel receptionist may have broken the rules in helping me that evening, but she secured for her employer a customer for life. Unless such acts are financially reckless, they should be rewarded and replicated across your organisation.
The conclusion that I hope you gain from this is that power in the supplier-customer relationship has shifted, and it has done so dramatically. That this has occurred at the same time that customers now expect perfection is no accident. Rather, it is the relentless pace of technology innovation, appification, and nearly perfect access to information that has given consumers the ability to expect more. Organisations that adapt to these changing expectations are likely to reap rich rewards in customer delight and loyalty, those who do not stand to see their customer base eroded quickly as they struggle to figure out why, “I can’t help you,” is no longer an acceptable answer.
About the Author
Christopher Surdak is an Engineer, Juris Doctor, Stra-tegist, Tech Evangelist, and Author of Data Crush: How the Information Tidal Wave is Driving New Business Opportunities, geAbstract’s International Book of the Year for 2014.
2. The United States Federal Reserve.