Good service makes customers happy, bad service drives
them up the wall. Everyone knows this. Yet the reputation of customer service
reps is a darn sight below that of tort lawyers and stock brokers. Comcast is
being crucified in the media for its comically bad customer service and
complete lack of internal alignment across its vast operations. A very painful
process for a company anxious for approval to gobble up its largest competitor
in order to rule cable in the US the way Sauron ruled Middle Earth. Why is it
so hard to deliver good customer service?
Because good customer service costs money. Large amounts
of it, all the time. This means that there is a tradeoff between customer
happiness and profits. These seemingly opposite aims must be held in perfect balance,
or you risk falling off into either non-profitability or a damaged brand. Let's
have a look at the tightrope.
Products and services are priced to include some
measure of warranty and customer service. This surcharge is usually based on
the expected number of defects and mistakes in the underlying business
processes.
To keep the price competitive, the 'service tax' is
kept to a minimum. There is also a certain margin built into the sell price of
goods and services to grow the company and show profit. Any activity that is
not priced into the product or service itself is eating away the margin of the
seller. This disincentivises gold-plating customer service, because it either
makes the price uncompetitive or decreases profits.
Obviously, being too stingy has huge disadvantages,
and in the age of Twitter it can kill your brand for
good. 'Comcast' is going to mean comically bad service for a decade, even in
the unlikely event the company manages to turn
its customer service around. Conversely there is competitive advantage in
having great customer service, because it makes your brand stronger.
Many companies create mechanisms to make sure they
don't fall into the brand-killing abyss. Jim Collins wrote about Red Flag mechanisms, whereby the customer can
truncate his invoice my crossing off unsatisfactory items. Lean Six Sigma
places a lot of emphasis on the "Voice of the Customer" to make sure that
feedback from the front lines is a big part of the decision making process.
Measuring the Net Promoter Score gives feedback about how evangelistic
customers are. The finance department makes damn sure that companies don't fall
off the other side by providing service at a loss. Yet the fundamental tension
between maximizing service and maximizing profit remains.
There is of course a third way. Call it the Gmail
approach. Call it Apple's baby-proof ease
of use. Simply put, create a product or service that is so easy to use and so
well-tailored to the demands and expectations of your customer that they are
happy even without any customer service at all, or that they are able to
perform most service themselves. Make support mostly unnecessary. This means
really having your ear to the ground and be willing to do whatever it takes to
deliver the right thing at the right time. It means lightness and agility to
stay on top of changing expectations, not usually a large company's
forte.
This article, ironically, describes Comcast
trying to do exactly that: deliver service that doesn’t need support. It did
not protect them from the damage cause by mishandling the customers who did
have to call. So even when your equivalent to the Genius
Bar is barely used, it has to be very good and focused on
having a happy person hang up, even when they don't want to be your customer
anymore.
The damage to the Comcast brand is done and cannot be repaired. The story
however, can serve a greater purpose for monopolists and startups alike: give
the people what they want, not just what you want to give them. Only a few
true visionaries can tell customers what they want before they figured it out
themselves, like Jobs did with the iPhone and Musk with the Tesla S. For
everyone else, stick to the trenches and be quick on your feet. The battle for
your brand won't be won any other way.
