If Service Is Really So Bad, Why Aren’t Customer Complaints More Effective, and Where Is Customer Service Trending?

By Michael Lowenstein

  Michael Lowenstein, CPCM, is managing director of Customer Retention Associates, a customer and staff loyalty program development, research, and consulting firm located in Collingswood, New Jersey (www.customerloyalty.org).

  With over thirty years’ management and consulting experience in customer and staff loyalty research, CRM, loyalty program development and refinement, customer win-back, service quality, customer-driven corporate culture, and strategic marketing and planning to draw on, he is an active speaker, workshop facilitator, and trainer, and he is a regular featured contributor to three customer loyalty newsletters.  His keynote, general session speaking, and workshop facilitation assignments have been in the United States and Canada, Europe, South America, and Africa.  He also provides expert customer loyalty commentary and articles for several professional CRM sites on the Internet.  

   Michael is the author of two widely-regarded books:  Customer Retention: Keeping Your Best Customers (1995), and The Customer Loyalty Pyramid (1997).  He is also co-author of Customer WinBack: How to Recapture Lost Customers – and Keep Them Loyal (2001).   Additionally, he is a contributing author to Redefining Consumer Affairs (Society of Consumer Affairs Professionals, 1995), The Answer Book for Customer Service Managers (Bureau of Business Practice/International Customer Service Association, 2000), and Customer.Community: Unleashing the Power of Your Customer Base (Jossey-Bass, 2002)

   He has been a customer loyalty instructor for Pennsylvania State University and the American Management Association; and he holds an M.B.A. degree in marketing from the University of Pittsburgh, and a B.S. degree in economics and marketing from Villanova University.  He is listed in several international, national, and professional Who’s Who directories.  His clients include First Union, Toyota, Prudential, Westvaco, Cigna, Charles Schwab, Borg-Warner, Sygma, Comcast, Baptist Health Care, Metropolitan Life, Microsoft, Alliance of Community Health Plans (ACHP), Daimler-Chrysler, and Georgia-Pacific.  

   Customer Retention Associates specializes in helping clients optimize customer loyalty and value through customer and staff loyalty research, loyalty program development and refinement, loyalty action training for front-line staff and management, and customer save and win-back protocol development.  The company is a founding member of the CRM International Consortium (CRMIC), an affiliation of independent CRM and customer loyalty practitioners from around the world, which is based in Europe.  The mission of CRMIC is to offer leading-edge customer loyalty and value solutions.

   Although the technology for relating to customers, and providing personalized support, has significantly increased over the past few years, customer service, especially online, continues to deteriorate.  At least, customer service appears not to be a priority in some companies and industries.

   Marketing Business recently reported that, in a recent survey when fifty-two UK-based food companies were sent an e-mail requesting basic information, there was a disappointing range to their response.  Sainsbury’s,  as several others, did not respond at all.  One took three days, and others responded but did not send adequate information.  Morrison’s was the only company to respond by telephone, asking if they could be of further help. 

   In the United States, the news is about the same, if not worse.  The customer service people of  Martha Stewart, America’s domestic goddess turned entrepreneur (her own bedding line at Kmart, web site – Marthastewart.com, and magazine), failed to respond to a series of e-mails by a would-be customer.  That’s only the tip of the iceberg.  In a recent e-mail response study conducted by Peppers & Rogers group, only 46% of 65 well-known Internet retail companies answered within 24 hours.  More revealing, 20% never responded to e-mails at all.  At the other end of the spectrum, almost 25% responded within two hours.

   With the number of retail sites going out of business, or merging, and customers’ growing demand for both speed and service, the pressure to handle e-mail quickly and efficiently will increase.  The same applies to other forms of on-line customer service, and offline service as well.

   There are ways for consumers to express their feelings about the quality and performance of ecommerce  sites as well as the calls, letters and emails to traditional bricks and mortar suppliers.  Online rating service thecustomerisalwaysright.com identifies the overall customer service of 1-800-flowers.com as inferior.  Other customer advocacy sites like Planetfeedback.com and epinions.com post complaints about customer service, by company and industry.  Managed care company Aetna/U.S. Healthcare’s service rates a D+ on Planetfeedback’s site, and truck and trailer rental company U-Haul, and long-distance telephone supplier MCI WorldCom each rate a D.  For these companies, complaints outpaced compliments by almost a ten to one ratio.  On epinions, over 70% of the reviewers would not recommend the customer service of long-distance carriers Verizon and Cellular One.  So, there certainly appears to be increasing public scrutiny of products, services, suppliers and their customer service.  Is that the reality?

   Well, the jury is still out on how well suppliers are paying attention to customer concerns.  The American Customer Satisfaction Index, which attempts to measure the perceived quality of service delivery for industries across the United States, has found that satisfaction scores for airlines, banks, department stores, fast-food restaurants, hospitals, hotels, and telephone companies are all down.  Even taking into consideration that satisfaction scores are rarely a true indicator of customer loyalty, this is problematical. 

   It seems to me there are three fundamental issues involved in improving customer service.  The first is senior management attitude.  If companies like airlines see themselves as providers of seats for travel, rather than as service organizations, that shapes the culture, structure, systems, and virtually every process within the company.  Customer service is viewed in those companies strictly as a cost rather than as an ambassador for positive perception, a conduit for dynamic information flow, and also as an engine for increased revenue.  Recently, I conducted a workshop at a managed care customer service conference.  Because customer service staff activities are typically so closely and rigorously monitored, with tightly managed performance metrics, one executive asked me how she could get the rest of the company to account for their time, in quarter hour intervals, just like her department.  My reply was that, if the rest of the company wasn’t on a time clock, then she should question why her department was singled out to do that.  At first she seemed amazed by my observation, but very quickly she acknowledged the fundamental unfairness of her situation.

   The second issue is that customer service has become more complicated.  It may take 15 minutes to sell a long-distance telephone service, but it takes over 200 hours to train a customer service representative.  Brokerage firm Charles Schwab, for example, estimates that the length of calls to Schwab has increased by 75% over the past five years.  They have also increased the number of customer service representatives threefold.  This also puts pressure on keeping these highly-skilled knowledge workers.

   Finally, the human factor, the ‘heart’, if you will, in relationships with customers, seems to have been drained from many customer service operations.  The technological innovations that are available to customer service  have only served to further remove them from direct customer involvement.  It may be less expensive to have bank balances available by automated telephone menu than by a human being, but the empathy involved in answering questions and fixing problems has gone into hiding. 

   Amazon, for one, considers every customer interaction an important opportunity – to learn.  The company tracks the reason for each customer contact, on a daily, weekly, and monthly basis.  There’s a group within the customer service department that does nothing but analyze and anticipate problems, and also develop solutions.  As an example, the number one question people used to ask Amazon was the status of their delivery.  Now, on every page of their site, beginning with the Welcome page, there’s a box labled:  “Where’s My Stuff?”  Operational changes at Amazon are truly customer-driven.

   For years, I’ve been preaching about the potential contribution, company-wide, represented by customer service.  At Amazon, it’s a reality.  Customer service representatives are involved on all Amazon project and launch teams as ‘the voice of the customer’.  That’s holistic, and the rightful role of customer service.