Richard J. George, Ph.D.

BrainTrust Query: How Consumers Killed Customer Service

December 29, 2009

FROM RETAILWIRE:
We went to the buy-one-get-one sales. We made Walmart what it is today. We camped out for Black Friday. We built the dollar store channel. The bottom line is that we voted with our wallets and customer service lost. Are consumers largely responsible for any deterioration in customer service at retail?      [more...]

I would argue with the premise that "consumers killed customer service." Consumers have always demanded a reason to shop at one retailer versus another. When retailers stopped providing any modicum of customer service, consumers responded by simply demanding a better price. In essence, she said, "If you are not going to provide me with customer service and expect me to do the work in your stores, then you will have to compensate me by lowering prices."

If you give the consumer two equal choices and the only difference is that retailer A offers a lower price than retailer B, retailer A will win the sale every time. Our goal in marketing is to never give consumers equal choices, differentiated only by price unless we have a functional cost advantage.

As noted, Apple and Publix have done a terrific job of using customer service as a real differentiator. The irony is that we do not have to ask the consumer to dig deeply into her wallet to provide "tie breaking" customer service. Remember the equal choices example and recall your high school science class in which you had a balance scale with equal weights on each side. What did it take to shift the balance? Very little! The same goes for customer service.

We have deprived customers so long it doesn't take much to produce a positive reaction. A couple of examples, one from retailing is Home Depot, who returned to having sales associates in the aisles offering assistance. The other is Verizon, once a consumer insulated public utility, who now uses customer service as the tie-breaker. If a former public utility can do this, can't the local retailer figure out how to break the ties without giving away the store?