Three Reasons Why Customer Service Stinks
Jay Goltz, a small business owner in Chicago, thinks there are three reasons why customer service is so terrible at so many companies.
1. Health insurance. It's too high, so to cut costs companies hire part timers. "It is difficult enough to train full-time people. Having them there part-time and having a huge turnover makes it all the more difficult."
2. Crazy pricing. Now that retailers engage in overhyped sales year-round, it's much more difficult to keep the right ratio of employees to customers. "When you have manic pricing, up one day, down the next, it wreaks havoc on customer service. When the sale is on, you don't have enough staff. When the sale is off, the staff stands around and complains about the slow business."
3. The lack of a merchant class. (We think that's what he's saying.) Most modern businesses don't pass down a tradition of how to value the customer relationship. Instead, impersonal corporate employees swoop in and make decisions that look good on paper, but ruin the ineffable sense of being appreciated that most customers long for:
When you walk into a store, and there is virtually no help, it's because someone figured out that the company could save X dollars if it cut back the labor budget by 7 percent. When you walk out disgusted and sales go down, the store blames it on the economy or brutal competition. Then the company reacts by having another sale which further erodes profit margins. This cycle eventually results in another failed store.
"Why Customer Service Is So Bad" [New York Times]
(Photo: mrmanc)
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Comments:
I would put that under 1, because they hire part timers and have high turn over they aren't attracting people who would care or like the comfort of a full time job.
5). Most management has removed the authority and ability for employess to think and use common sense. Rules / policies / procedures have grown more detailed an inflexible in an attempt to reduce everthing to a single response and measurable statistic.
At one time business had long-term employees who were trusted to use their best judgement in dealing with atypical situations.
We see a staggering amount of posts on Consumerist, where essentially, something out of the ordinary occured and the business did not use reason and common sense to resolve the situtation. Often, the attempt to force the resolution through the company policies results in outrageous treatment of the customer and can often be far more costly to the business than an intelligent deviation from the rules.
How do you get people who give a rat's ass?
1) You run a family business.
2) Employees have a real stake in ownership of the company.
3) You pay people what they're worth, reward longevity and loyalty.
Corporate America shuns all three.
@JGKojak: Ding ding ding! Until you give people a reason to do their job well, the vast majority of folks won't.
@The Donut Pirate: When I was paid $5.15 an hour to stock shelves and perform customer service back in '97 I sure as hell didn't care about the customer's needs. Hell, I wasn't paid enough to care if I did my job well, which was bad, because at the time I was in charge of the medical needs and alcohol department (weird combo, I know).
You can't just blame the companies for this one. Sure, they're all greedy SOB's, but when it comes down to it, companies are responding to consumer demand: "cheaper at all costs".
Suffice it to say that if the majority of consumers started to reward good customer service with patronage despite high prices, I think you'll see customer service improve dramatically. Basically, customer service sucks because we're cheap.
@JGKojak: That's all well and good, but when you do that, costs go up. Prices follow, and the store fails because Wal-Mart, Best Buy, etc. can afford to sell the same product 10-20% cheaper.
Consumers need to ask themselves, what's more important: low cost, or good quality service? It's almost impossible to get both at the same place.
@JGKojak: When I worked retail the thing I hated the most is that I felt my manager and the company did not give a shit about me. When a clerk goes to work and the attitude from the company is "You're lucky to even have this job and we'll fire you in an instant if we feel like it", the worker is going to be unhappy and wont feel any kind of motivation to actually provide decent customer service.
@SkokieGuy: What Skokie said. I spent a lot of my life being a CSR, sometimes specifically at others in a sort of round about way. The jobs that I had the most success were those that allowed me to use my brains and common sense.
CSR's no longer have any autonomy. Its a script that they follow and are not allowed to deviate.
BTW, those companies that don't allow CSR's to think for themselves I avoid like the plague.
@JGKojak: I agree completely. If corporate america wanted good workers, they'd have profit sharing plans.
And in order for profit sharing plans to be successful, they can't be run by people like Jeff Skilling and Ken Lay.
You have to give people an incentive not do do crappy work, but instead we have a country where 95% of the people are doing a job just for a paycheck and not because they're doing something they like to do or find any other fulfillment in.
It's funny how this issue comes up in cycles. We were just thinking about it ourselves and had a different reason for why things in Customer Service suck: That the "job requirements" from the people setting up the customer service only match that of a particular type of (dead) person: www.onezumi.com/2009/08/05/double-sized-deadly-requirements/
@SkokieGuy: Part of that falls under #1 as well. When you have full time, long term employees, you hire people that you can nurture and trust to make these decisions. When you hire part timers and treat them like temps, you don't waste time teaching them to make decisions, you just tell them "follow the rules."
@Pibbs: Maybe not "low cost", but Nordstroms isn't too outrageously expensive and provides great service. But yeah, worlds apart from Wal-Mart.
@Jevia: Today, even long-term employees are often bound up by policies and procedures. Sometimes you'll get a sympathetic CSR or such with enough tenure to know how to work around / against the "system" to achieve a reasonable outcome, but if there actions were subject to management scrutiny, they would be reprimanded or fired.
Although it sounds weird, the "lack of a merchant class" theory has more than a little merit. The father of a friend of mine, in my youth, had worked as the head salesman of a small men's clothing shop, for something over 30 years. He wasn't rolling in money, exactly, but he was comfortable (he made enough so his wife didn't have to work), it was a lifetime career, and at the time it was considered a respectable line of work for him to be in. There was no reason for him to do anything else, and he was known as the "go-to guy" in the area if you wanted to buy men's clothes.
Full disclosure: He sold me the first suit I ever owned, the one I bought upon my entry to college.
These days, the same kind of work is done by young folks who are largely not interested in developing a long career in that field. Their jobs are nearly all part-time and low-paying. Their ambition is generally to move on to some other line of work, which is not in retail at all. Because let's face it, the opportunity to do so, and earn a good living over a period of decades, simply no longer exists.
The demise of "the merchant class" does not really explain the current paucity of customer service, though. It was, instead, merely the result of other forces which were at work, starting in the late 60s. Mostly it was the encroachment of a new school of business management, which did a number of things all at once.
It destroyed small shops — like those my father's friend worked in — making them relics of the past rather than the places you usually went to, to buy things. It also treated employees as enemies rather than allies, paying them as little as possible and giving them no upward mobility, merely because they could get away with it.
This same school of management also established other movements such as "downsizing," "leveraged buyouts and mergers," and various other rationales intended to save every possible penny even at the cost of the high standard of living the US experienced in the wake of World War II.
I think you've pretty much summed up poor customer service. There's a lack of pride in a well done job...no matter what the job is.
Being older (Early 40's) I was raised to take pride in what I do...no matter what it is. I'm trying to pass on this belief to my kids.
Forget "employee empowerment", health insurance, all of that. There is only one reason.
It does not pay to have good customer service.
That is the only explanation needed. It is because customers have shown they will not (en masse) pay more for expert customer service. They will seek out cheaper with less service, every time, and the companies who spend more on customer service for non-distinctive products will quickly learn to hire less skilled and cheaper workers -- because for every one customer offended by lack of customer service, there are 5 to take his/her place in exchange for the cheap prices.
So people who complain about poor customer service, don't cry over a self-inflicted wound. You (collectively) did it to yourselves.
(of course there are a few more subtle factors here --
Sales jobs are not viewed as a highly respected profession, and thus cannot attract real talent for more than temporary work. Also, customer service now is about self-service -- learning about products online before you buy. And not going back to a store where you got burned. Instead of the 1950s tactic of taking time to encourage better customer service at your favorite store, it's cruel evolutionary selection at work. Don't give me a reasonable level of customer service? I will favor some other store and let you fail (as much as I am individually able).
@JGKojak: #1) only if you're a member of the family in question. Non-family members frequently get treated poorly.
@outlulz: You're onto something there, outlulz. I worked at a newspaper until they laid off half the staff last year. Every time our wonderful company president would have a "state of the paper" speech, he'd always say that the newspaper's two biggest expenses were "paper and people." Way to raise morale there, by making your employees feel that they're nothing but a drain on the budget.
I would also add that customer service is down due to the fact that most Americans have this grossly-inflated sense of entitlement. At some point in the last 20 or 30 years Americans have gone from caring about their jobs and their companies to somehow thinking that they're owed a career and a living. Most Americans think it's their birthright.
@The Donut Pirate: Actually, I think that is number 3: No merchant class. If it were a respectable trade that people did their entire life, they would give a rat's ass.
A lot like the difference between a cheap restaurant with summer help and a high end restaurant where the waiters have been there decades.
Health Insurance companies benefit by having poor customer service.
Generally patients and doctor offices only call when a claim is denied. By understaffing they force customers to wait on hold for long amounts of time, leading to customers giving up. By hiring poorly trained customer service personel they are able to pay very little and these people often make numerous mistakes, forcing customers to call back again to try to correct the problem. The CS Reps are not given any power so even when they do find a problem they can only escalate it. Much of the time these escalations are lost.
By denying claims incorrectly insurance companies are able to collect interest on that money, and their hope is that customers get so frustrated they give up.
@redskull: "At some point in the last 20 or 30 years Americans have gone from caring about their jobs and their companies to somehow thinking that they're owed a career and a living. Most Americans think it's their birthright."
Well, if I can't earn enough to keep myself off the sidewalk, what incentive is there for me to be excited about my job? I didn't realize it was presumptuous to want a living wage.
Kepler 11 is correct. A related issue is one I learned about in a class on data-mining I took when I got my MBA. Many businesses look at an individual customer as someone having a lifetime value that can be discounted to the present. They construct unbelievably sophisticated statistical models to see if you are the type of customer who, based on the abundant information they can easily retrieve about you, will make them a decent return over a span of years. They want each customer to generate a positive NPV (net present value).
One of the things that gets modeled is whether or not a customer calls customer service. Generally speaking, this lowers a customers' lifetime value to the company. Such people are costly customers. They are customers that, over their lifetime as customers, will cost the company more than they will pay. Or at least won't provide enough of a positive return.
So making you wait on hold for hours? Making you jump through the same hoops over and over? Making you miserable? These are simply signals for you to go. Indeed, with some companies, you are crudely ranked in terms of how they see you as a customer--good, eh, or bad. If you are a "bad", they may deliberately leave you on hold longer.
So when you finally get frustrated and tell the customer service person, "Your company sucks and you've lost a customer for life!" from the company's point of view, that may be a plus.
@larrymac: I had a hard time caring, but that didn't mean I didn't do a good job. I enjoyed what I did for the most part, and did my best to do it well. But the job had bizarre requirements. Employees were forced to crawl into recycling dumpsters (that were visible to the public) to stomp down on cardboard or working from 7-11A and then being told to come back in later from 5-9P to keep your job.
Because of that we all had a hard time caring. Our "poor attitude" wasn't because we were bad employees but because of low pay and stupid demands. If you had issue with it they'd threaten to fire you because you were easily replaced, and living on a military base overseas this was one of only a handful of jobs a kid could get. I worked for AAFES at the time, and they're not exactly an employee friendly company. Or at least weren't in '97.
@kepler11: Sadly though with B&M stores you don't have as much choice as you used to. I have three grocery store chains in my city and I have a problem with all three in some way. All the big stores knock all the places with great customer service out of business then you get stuck with the store with so many policies and procedures that only the store manager has any power to do anything about your issues.
@Jevia: That's my point. Discount and service are two words that don't go together. I've got two examples:
1. At work, I tend to eat out a lot for lunch. There's a local joint I go to, where the owner knows me by name, I can enjoy a delicious lunch for 8-10 bucks, and I get great service. At the same, I can go to a fast food joint next door, get food at half the cost, but have to pray that my order comes out right.
2. I used to work for Best Buy selling Appliances. I can't count the number of times that we would rather take a return instead of work hard to keep a customer because they bought something at a discount that we didn't make good profit on. The customers that bought good profit items? I'd bend over backwards for them. The guy buying a cheapo gas stove or washer for 279? Not so much.
Consumers pay for good service in a brick and mortar store. Online companies can do something that other stores can't, provide good service with good prices. Why? Overhead is much lower. The money that would go to pay for salespeople can go to pay for more customer service people.
Alright, I've mentioned before that I USED to work for Comcast as a cable guy. Being a cable guy we were told that we were the front line of customer service because we were dealing primarily with the customers by installing their cable and handling their trouble calls. There were a few times that the company did ride-a-long programs where call center people would spend the day with the cable guys, meeting customers face to face and seeing what went into a service call.
Each time I had one of these CSR's with me, the number one complaint they had was that the customers were calling for things that were their own mistake. For example one guy told me that a large number of "my cable isn't working" complaint calls were because the person would be having trouble going from a DVD back to cable, or their TV was on the wrong channel, or there remote was out of batteries, or they were tuned to a channel they didn't pay for, internet not working because your computer is infected with a virus, ect...
All three CSR's who rode with me said that it was the majority of their calls were customer error situations where the customer was furious with Comcast for their own silly mistake. I can agree to their statement as well since only a small number of my technician trouble calls were because of legitimate problems outside of the customers control. Being called to a customers house to change the batteries in their remote is an unacceptable use of anyone's time.
The point I'm getting at is that part of the problem with customer service will also likely lie with the customer themselves and failing to own up to their responsibility and instead immediatelty blame you for their own problem is tough to deal with time after time.
@kepler11: Generally I agree, hence the rise of Walmart.
However, I pay more to shop at my local Ace Hardware (same location since 1902) because they carry unusual items (the $0.50 cent washer that's common in sinks in my community) that the big box stores refuse to carry because it doesn't sell in enough volume.
I did buy a sink / vanity at Lowes that requires a pop-up drain. Lowes did not carry the drain REQUIRED to install the sink. And the managers and buyers don't care and blame the 'system' as if we humans have lost the ability control our own actions and decisions.
I also shop at ABT Appliance, which is revered by people in this area. Their customer service is legendary and while often very competitive, I would not considered shopping anywhere else - and I am not alone.
The OP runs Artist Frame Service in my area and there are MANY people who are extraordinarily loyal and would not consider taking their art elsewhere, specifically because of the service and knowledge of the employees.
@The Cheat: to The Cheat: No, but I imagine it's being said around what's left of newspapers across the country.
@kepler11:
Plus, if you do have good customer service, people are more likely to call for every little thing, instead of only when they are about to lose it. Less calls, means less overhead.
There's a great men's clothing store in my hometown of Edson named Jensen's Menswear. It has survived the Wal-mart's and other chain stores by still offering excellent service, especially advice. George, the owner, knows everything about the latest fashions, and is there to help almost every day. The prices aren't the lowest I've ever seen, but they are still quite reasonable (within 10% of the lowest), and I'm more than willing to pay that for the advice.
@JGKojak: I agree with everything except #3. How about if instead of rewarding longevity and loyalty, you rewarded competence and skill? I hate the idea that someone can suck at a job for 20 years and end up making some ridiculous salary because they flew under the radar long enough not to get fired.
@Starfury: I've always tried to take pride in my work, too, and I'm not up to my 40s yet. I'm still a birthday or two away from my 30s. But the jobs and companies are designed to wear you down, in service-sector jobs.
Friends who work in call centers can barely get a pee break. When I worked for GameStop, the regional suits kept cutting and cutting and cutting the hours our manager was allowed to give us, even though we were consistently one of the three highest-performing stores in the city (that city being NYC, a retail region unto itself). The company would create incentives for the managers basically to screw over the front-line employees as much as possible.
End result? The GameStop I worked at is the only one I've ever been willing to shop at. And the one nearest my apartment is staffed with teenage stoners.
4) CUSTOMERS TREAT PART-TIME EMPLOYEES LIKE CRAP. I'm sorry, but I loved my retail job (I paid for college and grad school with retail) and I loved *some* of our regular customers. But many of our customers treated us like garbage, or walked into the store EXPECTING a confrontation. Christmas was especially horrible. I once had a woman talk about me as if I wasn't standing right there - she was telling her daughter that she *had* to go to college or she'd end up like the illiterate people working in that store. I told her I was working towards a Master's degree, but she was living proof that a college degree did not guarantee common sense or compassion. Better customers = better customer service.
@kepler11: Or the same customers will harass and shame willing employees into husks of their former selves.
@pb5000: Yeah, I hear you on this one. This goes hand in hand with forcing employees to use a script when dealing with customer service. Not only do they have trouble with genuine issues that are out of the ordinary, they are also not permitted to diagnose what is obviously a user error. I imagine you had a lot of cable guys doing basic TV hookup that had little to do with the cable installation, all because the CSR can't say: "Look dude, your remote is out of batteries."
I know that we should always be kind and courteous, but I think our culture would to well to embrace more direct forms of confrontation. It would force us to grow up that much more, and we would get a hell of a lot more done.
@pb5000: Well, there will always be old people and idiots to fill that category of, "Honey! Call the police! The TV won't change channels!"
Home Depot is the ultimate example of #3. Cutting staff in a store where people are more likely to need help than similar big-box stores is a recipe for disaster.
Of course, Bob Nardelli went from there to driving Chrysler into Chapter 11...
Chase - nice job in outsourcing your telephone customer service to Indian call centers with no latitude to solve problems. You've driven another customer to a credit union.
@Etoiles: Another problem which doesn't get mentioned as much as it probably should is the difference between customer service philosophies whether you are looking at it from the corporate or customer side.
The last two companies I worked for constantly sent us internal communications that let us know that, in their minds, we were providing "excellent customer service" if we were upselling and tacking on as much extra crap as we did. Corporate was off the belief that upselling all our customers to the moon would create "Strong customer relationships" that would lead to repeat business. Hmmm.....
Also, many companies go way the hell overboard at minimizing loss, to the point where customers are denied proper compensation because the store or businss doesn't want to lose money. I've posted before at Sprint about how I lost my ability to give credits because I was giving so many to correct billing errors and make up for the incompetence of previous Sprint reps and about the time I was REPRIMANDED for crediting someone who was needlessly transferred EIGHT TIMES.
The problem is the corporate suits are only looking at numbers. If the sales are down, focus on upselling and boost them. To keep profits high, avoid losses however you possibly can. Also they rely on those silly customer surveys they more and more frequently try to force people to take.
I've long believed you can't really just good customer service by numbers, you need the stories behind the numbers, but most corporations don't give a shit about that.
In my training sessions with Sprint they droned on and on about the importance of customer service, but then when I got on the floor, I quickly realized that was more important than customer service was to make as much money for Sprint as we could, to the point of adding fraudulent charges to people's accounts, unlawfully extending their contracts without their consent, and a whole bunch of other nasty stuff.
I saw employees get BONUSES and huge commissions because they unethically boosted their numbers using the techniques above. Management for the most part turned a blind eye. I was there over a year and little changed with regards to corporate philosophy in that time.
@dragonfire81:
Speaking of Sprint, do they still make new activation's first outgoing call go to a Sprint call center where a rep tries to upsell them? Or did they quit that. For a while, a new cust had to sit through a 5-10 minute call before they could make anymore outgoing calls...





















I'll give a fourth reason: the customer service reps just don't give a rat's ass.