Category Archives: Why Bother with Customer Service

Customer Service Levels Decline

Posted on 14 May 2012 by | Leave a comment

Once again American Express has released its Customer Service Barometer (2012 version).  Once again, the findings aren’t pretty (see below):

  • Companies consistently miss expectations and are getting steadily worse – 31% in 2012 versus 26% two years earlier.
  • 2/3 of customers are willing to spend more with companies that provide excellent service.  This finding bears out earlier studies.  For those willing to spend more, excellent service translates to 13% more (up from 9% in the 2010 study).
  • Social media is not yet a mainstream mechanism for delivering customer service.  When social media is used to make an inquiry, consumers can count on responses only 31% of the time.   (See this opportunity/risk analysis of using social media to deliver customer service.)

The downward trend in so many metrics suggests one of three possibilities:

  1. Companies are not taking the data to heart.
  2. Companies are delusional about their current state – This option seems likely given The Temkin Group’s finding that 65% of companies rate themselves better than average.  (Mathematically possible, yes, but unlikely just the same.)
  3. Companies are incompetent at implementing the necessary changes.  If this is the case, American Express provides handy “tips” to help.
    1. Great service starts with people – Absolutely agree!  This is also the place poor service starts too, so beware.
    2. Listen to your employees – Only works if employees are listening to customers.
    3. Every interaction is an opportunity to drive engagement – I recommend this book to elucidate.

Nothing in this report changes previous conclusions – the path to greater profitability starts with engaged employees exceeding customer expectations.  The pivot point is to take the actions that will yield the biggest and most immediate positive impact on your customer experience.  Customers clearly want us to succeed and are willing to pay more!  The results show just as clearly that we aren’t.

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Posted in Customer Service, Why Bother with Customer Service

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Things You Should NEVER Tell Your Customers

Posted on 1 April 2011 by | 3 Comments

Managing customers is tough because they typically expect the world and they expect it for bargain basement prices.  If you interact with customers you will inevitably come across a time when the relationship becomes difficult.  In order to ensure your company doesn’t go bankrupt serving customers, avoid making these common mistakes.

NEVER Admit Regret or Fault

  • We Were Wrong – Admitting fault is a cardinal sin in customer service.  Customers call for the primary reason of getting something for nothing.  Many companies try to create cultures where the “customer is always right.”  Don’t make this mistake.  If your customer service reps make the mistake of admitting they were wrong, you can be sure that your company’s profitability will suffer.
  • I’m Sorry – Admitting regret (even a little) puts your company at a disadvantage when dealing with the customer and limits your ability to extract yourself from the confrontation.  And while it sounds innocuous enough, when a customer senses weakness you can expect them to ask for product rebates, service term extensions, discounts… the list never ends.

AVOID Guarantees of Any Kind

  • We Guarantee Your Satisfaction – Impossible, so why bother saying it?  Customers who want to fleece your company for all they can will use this statement as a never-ending series of excuses to keep changing what they want.  You delivered the pink iPod?  They want the blue one.  If your company is so poorly run to make a guarantee like this it deserves to pay the shipping… twice!
  • Money-Back Guarantee – We live in a free-market economy with more information than ever available to consumers.  Before they make a choice they can read reviews, shop for prices, compare competitive products, etc.  So once the transaction is complete, you’ve more than earned every cent you receive.  Plain and simple, it is a rookie error to offer money back to unsatisfied customers.

The pivot point when serving customers is to ensure your company does NOT give ground to consumers who will otherwise destroy your bottom line.  Create the appearance of a loophole in your customer service policies ONLY at your own risk.  

Happy April Fool’s Day! Did I trick you?

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Posted in Influential Factors - Harmful, Why Bother with Customer Service

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American Airlines’ Poor Policy Costs $75,000

Posted on 14 December 2010 by | 9 Comments

A recent experience trying to get a standby seat on an American Airlines flight left me baffled.  What does it say about a company if they could treat you well, but don’t?  Does such a company value your business or take it for granted?


  • The plane had available seats.
  • I had a ticket on a later flight.
  • The gate agent said that American Airlines’ policy was that I couldn’t get a free standby seat.  (Not a friendly policy, but I can understand that they might want to charge a “change fee” to take a different flight.)
  • BUT adding insult to injury, the policy also prohibited the option of paying a change fee to take the earlier flight.  Huh?  Are they afraid they’ll run out of peanuts?

It used to be that customers could take an earlier flight, if space were available.  Now, even when space is available you can’t buy a seat?

From a customer experience perspective this policy is, well… stupid.  The policy is just as detrimental from a business perspective because customers have choices.  In this case, I walked further down the terminal to a rival airline (Southwest) and paid $250 for a ticket.  What did/will the policy cost American Airlines?

  • An unsatisfied customer who will relate the poor experience via word of mouth
  • A nominal change fee
  • Approximately $75,000 (future value of my air travel)

The pivot point is that companies should seek ways to serve customers and earn their loyalty instead of implementing policies that alienate customers.  Last I checked the airlines weren’t so healthy that they could look down their noses at customers.  But if American Airlines chooses to implement such a policy, then consumers can certainly choose to take their business elsewhere – I did and I will.

What companies have earned your scorn and lost your business?

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Posted in Customer Loyalty, Influential Factors - Harmful, Why Bother with Customer Service

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