DM News Views: The Heartbreak of Customer ServiceThis is part one of a two-part article.
What has happened to customer service and where is it headed? For those who observe change, the future of customer service appears bleak. But is there a way for the multichannel direct marketer to win the War for the Customer's Heart?
As an observer of the direct marketing industry for more than 30 years, I have been afforded perspective with which to comment on trends. In the past 12 years, I have been watching and collecting the evidence of a major shift in the concept and execution of customer service. In my 1993 book, "Libey on Customers," I described the historical practice of customer service and its deep foundation for near-permanent customer loyalty. Superb customer service was, in my estimation, the secret causing the growing dominance of DM over retail. But today, America's practice of customer service - with a few bright exceptions - has plunged to appalling new lows.
1. Expectations. Nothing really works any longer. The hub system of airline transportation is a horrendously flawed and utterly failed experiment that has produced no customer service, satisfaction, loyalty, utility or profitability. Cable television, cell phone and telephone companies are faceless, service-starved behemoths dedicated to their own local oligarchies. Corporate restaurant chains produce cookie-cutter formulas that spew out mediocre food along with obsequious wait staff whose only skill is writing their name upside down in crayon on the cheap paper covering the table. The commercial experience nearly everywhere has become dreary and gray, and we have become anesthetized and tolerant of it.
The past 20 years have brought an erosion of customer expectations. It no longer is expected that retail personnel will be knowledgeable, helpful, courteous or caring about your purchasing experience. As customers, we have learned to expect almost nothing, and we seldom are disappointed as a result. The shopping experience in the retail setting of 2006 is vastly inferior to that of 1976, 1986 or even 1996. The customer either has "dumbed down" personally or has been "dumbed down" by the industry - or both.
To compete, merchants must fight price at every turn. To compete, merchants must battle selection, facility cost, wage cost, cheap imports and a host of overhead, inventory and other costs, the control of which has been elevated to an art by big-box merchants with near-socialistic global appetites, specifically Wal-Mart and its spawn. As a result, staffing costs have been reduced in quantity, quality, training and benefits. Retail customer service has migrated from a meaningful career to a minimum-wage, part-time, temporary, high-turnover, zombie-like, dead-end job.
And so, after almost two decades of erosion, the 2006 customer has almost zero expectations as a learned and conditioned response. Wal-Mart - the present-day Skinner box - has trained the rats to expect nothing and be happy. It takes only one generation to establish a new norm. If the only thing you have known is zero customer service, then zero customer service appears normal.
2. Internet. In its second incarnation, Internet commerce has elevated customer service to algorithms. A classic example of the dichotomy of the appearance of good customer service and the reality of appalling customer service is found with Amazon.com. If you wish to buy a book, or a smoked turkey, or a toy, or a tool, the algorithms are essentially flawless and instantly satisfying. The appearance of customer service is matchless.
But if you are a supplier trying to correct errors in product descriptions, release dates for new books, prices, carton quantities or thousands of supply-chain details involved in fulfillment and product listing, or if you are a customer hoping to return something, Amazon.com is a failure. The firm cannot be telephoned. Human problem-solvers do not exist. Vendor service is reduced to faceless e-mails sent in endless loops of non-functional problem non-resolution. There is no chink in the outer skin through which one might gain entry to the real company behind the façade. Amazon.com has wonderful algorithms, but no viscera, no blood, no soul.
The Internet experience has capitalized on the dumbing down of customer service expectations by reducing expectations further to canned processes that fit 70 percent of the demands. This "70 percent solution" goes by the pseudonym customer relationship marketing, a term that simply means, "No service here."
The ubiquitous CRM systems have brought you the Festival of Miracles of trying to correct a telephone billing problem, retrieving the service history for your automobile warranty, finding your lost blouse at the dry cleaner, flying anywhere on schedule and registering your Microsoft Office software at some location in Bangladesh.
Increasingly, little works, and the only way to fix the customer service problems that crop up at every turn is to pay someone who knows how to go around the problem to the solution. The computer on which this is being written has a Hewlett-Packard wireless printer that has required five house calls by the Geek Squad at $89 an hour to reinstall the software because of glitches for which there are no solutions. Try to get someone at HP to talk to you about the problem. Try to use your printer at five in the morning by resorting to CRM. Nobody's home.
3. Price. Price is becoming the main driver of commerce, and customer service consequently has eroded and will erode further. The customer without expectations, Skinner-box-trained to seek out a Smiley Face representing an impoverished mentality of Low Prices - Always, ultimately will use price as the mindless determinant for consumption. And the mega-retailers want that to occur. This trend is growing, not only in the United States but globally. To obtain the lowest price, most people will forgo customer service, convenience, quality, even cleanliness.
Combine price with the Internet and zero expectation for customer service and you arrive at a place where the retail world had to go in order to compete globally: lowest-price-driven, comparative, product integrators that have reduced costs to the lowest possible level through "greatest-majority" algorithms and the fewest number of employees. This is called Profit Maximization. It's what the shareholders have been conditioned to get when they peck at the investment lever.
The convergence of these three influences has produced a retail experience of customer self-service. If you want something, get it yourself, do it yourself, research it yourself, sell yourself. By and large, the only customer service function that has not been converted to self-service by the dominant retailers is the receipt of cash and credit card charges, and even that function is endangered.
Next week: More on the retail and multichannel experiences and some solutions.