Economy Class and what went wrong with Customer Service?

Couple of thoughts on quality of customer service, that flashed through my brain while waiting for a Qantas stewardess after pressing the “call attendant” button, only to see her rock up 10 minutes later, turn off the little light over my seat, don’t ask a word and briskly return to her chit-chat with a fellow stewardess. “Bottle of wate… never mind!”

So, what went wrong with customer service?

• Market integration. Most oligopolies or otherwise big corporations that service you every day (telcos, retailers, Travel companies, banks, etc) don’t pay much attention to customer retention. They are too busy reengineering every quarter, and it just turns out that their customer is far less important than the shareholder. They maximize the customer value for today, and don’t plant the seed for future customer satisfaction. Why bother anyway, if you might yourself end up being swallowed by a bigger fish. And the corporation that takes you over cares only how much you milk your customers today, not if they’re likely to be back in future.
• Loyalty became a myth. Despite all the hype that loyalty marketing and CRM attracted recently. Companies acquire (organically or in bulk) customers still at a fairly low cost and therefore don’t have incentive to keep them loyal. Customers themselves hate to be tied up and are very prices sensitive. In the era of mass availability, instantaneous findability, Google, experimentation, free trials, price comparison engines and low switching costs, customers don’t need to lock themselves to a particular brand. “Let’s try the new thing”.
• Incapable technology. Good customer service is about detail and personalization. These are easy and cheap when you run a corner convenience store, but super-expensive and procedurally impossible when you run a business that spans continents (especially if that company continually acquires new entities with different CRM cultures/processes/systems). CRM technologies are still in the nursery and it will be years until technology allows us to run Wal-Mart scale operations with the corner bakery flair for customer service.
• Corporations are so keen to make a buck for their fickle shareholders, that they cut costs left right and centre, cutting human touch-points in the first instance. Proliferation of call-centres, IVRs, and other automated approaches does increase efficiency, but removes flexibility and personalization.
• Pareto style polarization. With abundance of data-mining technology and ubiquitous business intelligence allowing companies to endlessly segment down to their single biggest spender, customer bases are getting polarized into tier1 VIPs who can count on a top-notch service and the rest – plebs, waiting 20+ minutes on IVRs in India, squashed in Economy compartments or being intentionally disconnected to get their bandwidth transferred to Golden customers. There is no middle tier these days. You’re either part of the top 20% contributing 80% revenue or you will be left to your own devices, because they simply can’t afford servicing you.
• Outsourcing and Offshoring. You wouldn’t do well as a head of a global customer service department if you didn’t act on the information that your full time employee in Australia could easily be replaced by 100 headcounts in Bangalore. Nothing wrong with it, one might argue. After all, labour shifts to 3rd world countries evenly distributing wealth, costs fall, shareholders grin wider. So what’s the problem? Usually they don’t hire 100 folks in India to replace one headcount in Australia. It’s more like 1 to 1. Costs go down, efficiency and wait times? Not always.

Last minute comment: I swear not to whine about customer service in Australia ever again. Having spent almost a month in Poland now, I declare that the bottom can actually be much much lower… more about it in future posts.

Filed under: (in English), business & strategy