Customer Service and Profits

“American consumers spend, on average, 13 hours per year in calling queue. According to a 2010 study by Mike Desmarais in the journal Cost Management, …”

Customer Service. According to this Harvard Business Review article, many companies provide sub-par customer service knowingly as a way to increase profits.

Mostly the article talks about customer service related to receiving some sort of restitution – a rebate, return or other redress. Their logic is that if you present the consumer with more hoops to jump through, they are less likely to make it all the way to the end where they receive satisfaction and you have saved yourself the cost of that redress.

My question is, at what cost? Sure, maybe if you are “lucky” enough to be in an industry with monopolies and your customers have little to no choice in who they use – I’m looking at you cable companies and airlines – then leaving the customer with a bad taste in their mouth is all well and good. However, for the rest of us in the real world with real competition, this makes no sense.

What if you prioritize support? And prioritize providing a quality service at a reasonable price? These companies are trying to make it hard for people to leave, but what if they don’t want to leave in the first place. Isn’t that the better option?

This may help us understand why some of the most hated companies in America are so profitable and why customer service, unfortunately, remains so frustrating.

Sources:

Original article from Harvard Business Review: Why Is Customer Service So Bad? Because It’s Profitable.

Image Source: The Met Open Access.  “The Flower Girl” by Charles Cromwell Ingham, 1846. Oil on canvas. “The plant itself is symbolic of frustrated love.”