Whither Customer Service?

In the last 15 years or so, as the world has become more inter-connected and huge new businesses have emerged, one constant trend has been the degradation of Customer Service.  Automation and technology improvements are supposed to help people.  Instead, even our routine experiences with service providers are less pleasant than before. My wife and I have had numerous conversations about deteriorating customer service, as I am sure a lot of folks have.  It does not matter where – be it the airlines, banks, phone companies, medical offices, or stores in general – customer service is mostly bad.  As recently as the late 1980s, customer service was excellent at most businesses.  Nowadays, we mostly get an answering machine telling us go to their web site or, we encounter phone prompts to guide us along in our queries.  But a lot of times, it does not solve our problem! Why is this so? According to the business press, most large firms are highly profitable.  By all accounts technology has improved by leaps and bounds – and yet….

A couple of days ago, I attended a talk by Dr. Bill Thomas, the founder of the Green House concept of elderly care.  He said that what prompted him to venture out to attempt to change elderly care, was that, he felt that in the existing industrialized care model, elderly care was suffering because not enough attention was being paid to the individual, to his or her immediate needs, or to how that person felt i.e.. care was not being down sized to the individual’s level.  And then it struck me.  That was what was happening to large businesses too.

Companies were growing.  Business processes, like purchasing, accounting, payroll, inventory, were being scaled up and centralized for efficiency.  Airlines were entering into code-sharing agreements with other airlines to enhance their reach, without increasing their fleet size.  As a corollary, customer service was also being upsized.  But that just was not cutting it.  It ended up codifying customers as numbers to be shuffled around and handled.  Unfortunately human beings are not amenable to this.  Hence the friction and customer dissatisfaction.

To avoid this unfortunate state of affairs, customer service needs to be downsized to the local level (i.e.. localized).  This runs contrary to the centralizing forces driving all the other business processes.  Maybe that is why we are all less happy in our interactions with large businesses, even as we all still love our local Mom & Pop restaurant or store.  Sadly, these small businesses are having a harder time competing with their super sized competitors in the financial realm.  As a result, they are disappearing.  To be fair, I do not believe big businesses are setting out to treat customers poorly.  Customer service has merely become a casualty of their upsizing their business practices.

So, how do businesses downsize (localize) customer service, even as they upsize (centralize) most of their business processes? Solving this riddle may be the secret to the next quantum leap in business organization and management.  This is what top executives should be trying to figure out, instead of wasting their time on useless  financial engineering.  This is what our management schools should be guiding their students towards, instead of churning out (graduating) quick-buck artists.

Another way of looking at this is that, we have passively watched businesses lay off people and automate, in the name of increasing efficiency and maximizing profits.  We are told that this is better for our retirement portfolios.  If that were true, we should be seeing a tremendous growth in our retirement accounts.  Anyone looking at their quarterly statements, would tell you that there is nothing to crow about.  Yet we have all become conditioned to accepting inferior customer service.  We don’t bat an eye, even as we go about checking out our own stuff at various stores, printing out our own boarding passes, checking-in our own bags at airline terminals, etc.  So in a nutshell, we gave up good customer service, took upon more of the associated tasks, even as were were paying for them, and yet got practically nothing worthwhile in return.  Looks like we made a really bad trade.

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