Corner Office-Our LOSS (Lack-of-Service Society)

Corner Office-Our LOSS (Lack-of-Service Society)

Where efficiency trumps effectiveness, no one wins—not customers, not companies.

Wouldn’t you love to be a fly on the wall at the board meetings of some of the companies that provide products and services you use? You would likely observe a parade of well-dressed executives presenting dozens of colorful Power Point slides summarizing financial goals and results with various operations metrics and the like (basically doing their own quarterly performance reviews in front of the board). Discussions would follow about the need to operate more efficiently, and eventually someone would suggest “opportunities” to replace employees with technology or “more cost effective, global resources.”

It’s now commonplace—especially in the area of customer service—to call an 800 number, be directed to a long list of menu options, and when you have finally exhausted your patience trying to connect with a human and are ready to hang up, a person magically comes on the line. By now your call has been routed to a “customer service” center in a foreign country, where someone who can barely speak English reads scripted responses. The opening line always starts with, “We are sorry, Mr. Sheffert, that you are experiencing this problem, but we first need you to unplug all your phones, TVs, cable boxes, and flush your toilets . . . .”

I realize times are tough and that decisions to increase efficiency and cut costs have been necessary in order for many businesses to stay afloat. However, my concern is that the pendulum has swung so far that we have reached a point in the U.S. where the focus on efficiency is making us ineffective from our customers’ viewpoints. As a country, we have evolved into what’s often referred to as a “service society.” But given my experience, and the experience of many others, I would argue that we have regressed into a “lack of service society,” or something I refer to as LOSS.


Protecting the Reputation Asset

Most enlightened boards of directors and “C” level executives would agree that the most valuable asset their company possesses is its reputation with customers and clients. Yet, when they make efficiency decisions, they often relegate customer service, thus their customers, to the lowest-paid employees or subcontractors available globally. Why more business leaders don’t understand the dangerous game they play with their company’s reputation when they make these efficiency decisions is beyond my comprehension. It’s a gamble with very high stakes—as I often say, a company’s reputation is earned in inches, but it’s lost in miles. And that applies to every interaction that customers have with your company, especially with customer service.

If more companies focused on their front-line employees and trained them to understand the true value of their customers and the importance of satisfactorily solving their problems, perhaps we could swing the pendulum away from this LOSS.

For example, if the person in India who recently attempted to help me with my home phone problem had understood that the cost of solving my immediate problem was a fraction of the amount of my past five years’ bills, or the future value of my next five years’ bills, she might not have been so rude and I wouldn’t have needed to talk to her boss’s boss to get resolution.

Or if the cable company customer service representative who told me there would be a service charge to send out a technician to fix their problem had listened more closely as I explained that it wasn’t one TV but all my TVs that were not getting a clear picture, she could have sent out the technician to solve my problem without me having to eventually speak with a vice president.

Or if the pharmacy assistant had thought about my many other choices to fill my prescription just within my neighborhood, she might have tried harder the first, second, and third times it took to settle the paperwork with my insurance company—until a helpful pharmacist finally got involved and solved the issue.

In all of these recent experiences, it took human intervention to solve my problems, but only after much persistence on my part to insist on the service I needed . . . and deserve. If each of these companies treat other customers the same way I was treated, they are very vulnerable to competitors taking business away from them.

From my experience in board rooms and as a CEO, I know how difficult it is to compete for market share, so to lose it because the highest valued asset (reputation) was relegated to the lowest level in the organization is total nonsense. I learned a long time ago that the lowest-ranking employees in an organization, if not properly trained and monitored, can lose more customers than can be gained by the highest ranking employees.

Missing Focus on Service Metrics

Consider how differently companies would be managed if, at their board meetings, the presentations focused on service metrics such as customer satisfaction levels, and trends in number of calls to the service center, warranty claims, and returned products. How different would it be if the directors asked for customer satisfaction surveys and mystery shopping results, and then read through and discussed every page of these reports? Or if they actually listened to the recordings of the interaction of their customer service people with customers? Or insisted that the lowest ranking employees, who have the most interaction with their customers, are highly selected and well-trained in customer service? I would bet that we would see less reliance on technology and outsourcing, and more emphasis on customer satisfaction and happiness. And while in the short run it might be a bit more expensive, in the long run, these companies would thrive and be more successful.

Wouldn’t it be great if the executives presenting to their boards would include the stats provided in the box on page 77 when discussing efforts to retain customers?

For years, business schools have taught that it costs between 30 and 34 percent of revenue to acquire a new customer, yet it takes a very small fraction of revenues to keep existing customers. But when business leaders are faced with difficult decisions about efficiency, this fact—for too many of them—seems to fade away faster than a gummy bear in my granddaughter’s mouth.

Don’t let your customers feel like your company is taking them for granted by making them jump through frustrating hoops to get their problems solved. Instead, help turn the tide around by focusing first on how effective you can be with customer service, rather than focusing solely on cost-saving efficiencies.

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