13
March
2018

Customer Service

With all the advances in digital technology and electronic communications, and the consequent budget pressures, has big business lost the critical element of personal contact with its customers? 

  • Does big business care?
  • What`s your experience?
  • Do you find yourself becoming a frustrated customer?
  • How do you react?
  • Do you feel anger and take action?
  • Or do you passively accept?

 

I produced my ebook on the Fundamentals of Customer Service in September last year, in which I extolled the virtue of customer service as the key business differentiator. Since then however, I have been pondering the extent to which we as customers are really concerned about service.Specifically, does our behaviour always mirror our outrage at events? Here are some instances which have caused me to ask the question.

Remember “Dieselgate”.

VW was the first business to be caught, but they`re not the only one. There has been widespread, deliberate manipulation of emissions data to avoid the need for car engine redesign, or the addition of expensive diesel particulate filters.

What does this say about the attitude of mind of those responsible for it? I include the individuals directly responsible and the senior executives who have ultimate responsibility – whether they knew directly or implicitly condoned the practice.

Who do they feel most accountable to? Their shareholders, their fellow employees, their customers?

The upshot was that immediately the company`s value fell substantially and there were changes to senior management.

But as customers, how have we reacted?

The scandal first broke in September 2015, but within 12 months the company was reporting increases in sales.

What about the banks.

They have some very real challenges. 

Some of these were self-inflicted by the drive for growth and profits. The scale of irresponsible lending and the sale of products which customers did not need, are all well-documented.

What was the attitude to customers? There has been a massive loss of trust, which the banks are now working hard to address. However, do you sometimes feel that their TV commercials, based on emotional attachment, are just a touch cynical. Action not words is the motto!

They are also faced with the challenge/opportunity of the digital technology advances which can enable more customer transactions to be conducted on-line, without the need for expensive branches and people. We understand this. However, the seemingly unstoppable drive for more branch closures runs the risk of alienating many of the customer base.

As customers, what can we do, what do we do? Many have switched banks; however, my own observation is that many people just stay with the same bank, complaining, but saying that they are all just as bad.

The energy companies.

Price has always been regarded as the key motivator for customers to switch, despite the best endeavours of some of the major energy companies to deliver excellent customer service – I speak from personal experience.

The ongoing threat of competition has forced all the major companies to cut operating costs, now exacerbated by the potential threat of price caps, and guess what, the quality of customer service has declined.

What do you do if you feel that you are getting the best price deal but really poor customer service? Switch or not switch, and just put up with having to wait in an excessive queue to speak to a service agent and/or not having your problem solved? 

Latest statistics issued in March 2018 by Energy UK show more than 660,000 customers switched their electricity supplier in February 2018, a 60% rise on February 2017, and that over a million customers had switched so far in 2018. It is also stated that 4.1 million domestic customers chose a new gas provider, the highest since 2008. Government statistics show that in Q3 2017, there were 1.284M transfers in that quarter, an increase of 33% over the previous year. This represented 4.8% of gas customers and 4.6% of electricity customers.

Clearly there is activity, but I find that volume surprisingly low, given the strong promotional messages to encourage switching.

The airlines.

May 2017 - British Airways and the power loss incident. 

The power loss knocked out the IT systems, causing massive disruption for days.

How did the company react towards its customers?

The first issue was how to help its stranded customers.  Judging by some the stories, not very well, even though I am sure that we can all appreciate that it was a massive task. There seemed to be no coherent policy about how to recompense customers, with one message being to make a claim on personal travel insurance. All probably well-intentioned, but inconsistent, and not conducive to overcoming the sensation of being “on your own”.

The second issue was the one of responsibility and accountability. What caused the problem? How come the company`s disaster recovery policy did not kick in? Did it have a disaster recovery policy? It did not become clear at the time, and still has not been clarified. Instead, the emphasis seemed to be on blame avoidance.

How have we as the consumer users reacted?

Interestingly, BA reported an increase of over 30% in operating profits for that quarter over the previous year`s figure, and the parent company IAG reported an increase in annual earnings for 2017.

Seemingly, many of us are continuing to use BA.

April 2017 - Consider United Airlines and the forcible removal of a passenger.  

Remember how the videos of this incident went viral. We were all appalled at the physical manhandling of the passenger from the flight.

I guess that most of us have seen instances of overbooking and the requests accompanied by financial incentives to give up a seat and take a later flight.  

This is a consequence of the uncertainty of whether passengers with flexible tickets will show. We understand the financial loss of a no-show and an empty seat.

But physically bumping a passenger out of his seat and off the plane is more than a step too far, especially if the need is for airline employees to have seats.

The action was totally wrong and must have constituted an unlawful assault. The smart action would have been to increase the scale of financial incentives for voluntary re-scheduling.

The airline apologised after the event, but it begs the question as to why the staff at the airport believed that they had the authority to behave in this way.

What has happened since? Have customers left United in droves?

There was naturally an immediate and incensed public reaction.

However, the financial results for 2017 show a continuing highly profitable business, and here`s a gem from the annual report in relation to customer service – “decreased involuntary denied boardings by 92% since April”. I take it that this means that the number of passengers being “bumped” has reduced!

What`s the common theme in all these examples?

Where there`s a disaster or crisis, the main focus of the senior executives is on damage limitation, to protect the business, its share price, its financial performance. Protecting these is right and important. But what about the customers? What about the impact on their view of the company? Is there reputational damage as a consequence?

How do big businesses with massive customer bases regard their customers? As segments, as cohorts, because as customers we do adopt group behaviours. Yet, are they being fully sensitive to the needs and expectations of us as individuals?

So, I come back to my opening question:

Does big business really care about its customers?

What do we feel

Do we really care if big business doesn`t care about us?

On the basis of the above, seemingly not.

So, what does this say about us? Are we just complacent, reluctant to act? Or are we seduced by the product?

Whatever your conclusion, I still maintain my passionate belief and experience - that customer service is fundamental – and that the really smart organisations will always recognise this fact.

Categories: March 2018

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