The Critical Importance of Customer Service

I have become increasingly convinced that good customer service is the key way for a business to differentiate itself and stand out in our increasingly global, commoditized and hypercompetitive world.  But, as is usually the case, "standing out" can cut both ways, so the other side of this coin is that in a world full of social networks, blogs and other ways for people to express themselves, poor customer service may be the fastest way for a business to not just alienate its customers but do perhaps irreparable damage to its brand. 

One of the most fascinating talks I have heard in a while was given by Sunil Mittal,  Chairman and Group Managing Director of Bharthi Enterprises at IBM's recent Business Leadership Forum, which took place in April in Rome.  Bharthi Enterprises is India's leading telecommunications conglomerate, and has been growing its consumer base for cellular, broadband, long distance and other communications services at a torrid pace.  To keep up with this huge growth and keep lowering its already low costs, Mittal developed a very innovative business model: focus all the energies of the company on attracting, supporting and retaining customers and outsource just about everything else, including all the IT equipment and the  network itself.

Mittal said in his talk that originally there was a lot of resistance to this strategy.  People were calling him from around the world saying that IT and the network were the heart of a telecom business and that he could not possibly outsource them and be successful.  To which he replied that the customer, not the technology, was the heart of his business and then proceeded to implement his customer-centric strategy.  Bharti Enterprises is now one of the top five companies in India, and Mittal's target is for Bharti to become India's most admired brand by 2010.

I was reminded of the wisdom of Sunil Mittal's strategy by an article titled AOL said "If you leave me I'll do something crazy" in the July 2 business section of the Sunday New York Times. The article is about the kind of pounding that a major business and brand can take when things don't quite go right and a disgruntled, Internet-savvy customer decides to take things into his own hands.  It describes the experience of Vincent Ferrari, who called AOL to cancel his membership because he and his family no longer used AOL. 

Apparently it took Ferrari 21 minutes to complete the transaction, including time waiting on a queue and a five-minute conversation with an AOL customer service representative who made it very, very difficult for Ferrari to cancel the account - even after pleading over and over with the rep to close it.  Not only did Ferrari write about his experience in his blog, but he posted his recording of the five-minute conversation.

As the Times article notes: "Shortly thereafter, those five minutes became the online equivalent of a top-of-the-charts single.  To listen as Mr. Ferrari tries to cancel his membership is to join him in a wild, horrifying descent into customer-service hell."  The article later adds, "People who left online comments about Mr. Ferrari's AOL call expressed delight, more often than disbelief, in seeing public exposure of an AOL experience similar to their own. 'The same thing happened to me' is a refrain among the posts. Before the advent of the Web, an encounter with inept customer service was ours to bear alone, with little recourse or means to warn others. Now, Mr. Ferrari can swiftly post on the Web a digital 'documentary' that recorded his dismal experience, and news-sniffing hounds do the rest." 

I don't know whether this is an isolated case blown out of proportion or one that reflects a pattern of less than stellar customer service by AOL.   What I do know is that stories like this, if they occur often enough - or, perhaps, even if they are isolated - can do very serious damage to a brand.  More than ever, we need to listen and act on Sunil Mittal's wise advice: the customer is the heart of the business.
 
I also know this from personal experience – I want businesses I deal with to act as if they really care about me as a customer.  Netflix, for example, - which rents DVD's over the Internet, - is mentioned in the New York Times article as a company that provides exemplary customer service, including the ability to cancel the membership online with a few clicks in a matter of seconds.  I have written about Netflix  before, including the fact that their personalized online recommendations have introduced me to some great films and directors I would have otherwise missed.  So now I value and put a lot of trust in their recommendations.

But what has really won me over is what happens when there is a problem - in particular, when a movie seems to be lost in the mail.  After about five or six days, I can simply click on report shipping problem online, and choose from one of eight choices of problems to report.  If, for example, I am reporting that the DVD has not arrived, Netflix gives me a choice to declare it as lost and get a duplicate shipped to me as soon as possible.  Their only caveat is the statement, "If an excessive amount of lost DVD reports are filed on an account, we will place the account under review and notify the customer via email."  I have reported several DVDs as lost, although all but one have eventually surfaced. But because of Netflix's customer-friendly policy, the inconvenience to me has been minimal.

In contrast, I have had a less happy experience with XM, the satellite radio company. What really sold me on XM, beyond the large number of music channels they offer, was Luna, a channel totally dedicated to Latin jazz.  Although I like different kinds of music, I have a particularly soft spot in my heart for Latin jazz.  I enjoyed XM so much that I subsequently got a built-in XM radio in a new car I bought, and gave two radios and subscriptions as gifts to friends - so I now have four XM subscriptions in my account.
   
Then, earlier this year, I could no longer find the Latin jazz channel in my XM radio.  I learned from their web site that they had dropped the channel over satellite radio, although they would continue to offer it over the Internet, so you could listen from your PC.  Since I listen to XM almost exclusively when I am driving, this does me little good.  I contacted them via e-mail, and never got a response.  I called their customer service number and spoke to a service rep.  She was not too sure what I was talking about, but was nevertheless apologetic and polite and said that she would pass on my displeasure.  I still heard nothing. 

Let me assume that XM had a good business reason for discontinuing their satellite Latin jazz channel, but I cannot imagine a reason why I never heard from them when I expressed my unhappiness.  I have had similar experiences with XM previously, when trying to handle some billing issues and getting no responses or actions.  Maybe they are too busy and/or growing too fast to pay proper attention to customer service.  I used to really like XM.  I remain a customer, but I no longer like it quite so much.
 
Most companies I deal with offer very good customer service, both online at their website and with good service representatives when I need to talk to a person.  Having worked for so long at IBM, where customer service is such an integral part of the DNA and values of the company, I have little tolerance for any business that does not behave accordingly.  In fact, I often get a kind of perverse pleasure when something goes wrong with companies I do business with, because it lets me test how well they respond to a problem, perhaps the truest test of customer service.  If they pass with flying colors, it makes me that much more loyal; if the experience is frustrating, it pushes me away.

I really believe that in our increasingly global economy, the more a business aspires to be a successful globally integrated enterprise, the more local and personal the customer relationships must be.  Products and services might be commodities, but you never, ever want your customers to feel like they, too, are just commodities.  A successful business will make each of its clients feel special by understanding and addressing their unique requirements, and quickly solving problems when they come up.  This is really hard, which is why it may very well be most important way for a business to stand out from its competitors. 

Comments

[Nitin Goyal]

You have a valid point, however most of us are so "thick skinned" due to our past sad experiences with customer service that we dread even making a call. I wonder what choice does one have when he has to choose between devil (AOL) or the deep blue sea (Comcast). Personally, some of the strategies I follow to make sure that customer service reps do not make my life hell are at http://nitnblogs.blogspot.com/2006/07/service-providers-pain-in-rear.html

[Harsha Raghavan]

In regards to your specific XM situation and in general with globally integrated enterprises, what you expect is a personalized experience. I think, fundamentally, this monster called a "customer" aka me or I, needs to create that relationship with the rep. I don't support big lazy, uncaring megacorps, but you're just another check mark on their customer list until that mark has some meaning.

[Stephen Perelgut]

Excellent article (as usual)!

My own personal experience has led me to never, ever shop with Amazon again. The problem wasn't unexpected but the way they handled it was unacceptable and I don't trust them any more.

In simple terms (remembering from the top of my head), I ordered something with a "ships in 4-6 days". A few weeks later, I checked to see why it hadn't arrived and saw that it had changed to "2-3 weeks". After 5 weeks, I checked and the shipping date had changed to a specific timeframe which was the equivalent of 8 weeks from placing the order.

My complaints went unanswered until I used some internet savvy and a more aggressive tone. Then, after a short exchange, I had a commitment of the given date and an explanation of why things were late (but, not surprisingly, not a word of apology or a reason why the wrong information had been provided three times).

Two weeks later, I checked and the date had moved out another month. I cancelled my order and wrote to the "executive" who had eventually responded. Her first response was sympathetic and promised to look into the issue but it effectively amounted to a " - why should I care about one customer and their $110". The *promised* second response never came. I can only assume that Amazon "executives" don't honour their commitments and I won't deal with that company.

By the time it got to that point, many colleagues were watching over my shoulder (in a Web 2.0 way) and enjoying my frustrations. None of them will be buying from Amazon ever again. I figure that the poor treatment cost Amazon somewhere on the order of $10K/year given the people.

FYI - at the moment, I am using www.chapters.ca since I have a number of options and there are bricks-and-mortar choices. Customer service is OK although I wish they'd also pay some attention to getting the goods shipped sooner.

I also use www.ebay.ca - everyone I've ever dealt with there knows that my comment on their record matters - a lot! I won't buy from someone with too much negative feedback and I will exchange email before bidding if the person doesn't have enough feedback.

Their customer service is exemplary.

[Doug Karr]

It's ironic that you noticed the article in the New York Times. As with the AOL event, view any newspaper online and you'll find a means to sign up but no means to cancel your subscription. In addition, newspapers often continue to deliver after the cancelation because, by ABC rules, they are allowed to count that circulation.

Doug