Will consumers finally pay for service?
Consumers have been motivated almost exclusively by price since the Great Recession. And yet despite their demand for the lowest price possible, consumers have minimum expectations for service. The question for retailers is: How do you determine the ground floor?
In the airline industry, that minimum now firmly includes the idea that once you’ve taken your seat on the plane, you’re not going to be asked to get off. There is still a lot of angst over whether access to overhead bin space is part of the minimum consideration set for the price of a plane ticket.
But until the blowup in response to United’s uncaring policies and behavior, I never thought about the damage that might happen along the way. Retailers might think they’ll know when they reach the point where consumers say, “Enough! I will pay for better service,” but I think the reality is, there’s a lag between when consumers have had enough, and when retailers figure that out. And we may be in that lag space right now.
Take, for example, all of the punitive posts on social media every time there is a customer service failure. Facebook and Twitter are chock-full of consumers posting either about companies behaving badly or rants against perceived injustices.
Consumers seem to be getting angrier and angrier about how they’re treated, and when brands aren’t providing good customer service (because they believe that consumers don’t want to pay for that service) then we end up in a vicious cycle. Consumers won’t pay for service, retailers won’t provide it, consumers get mad, and then retailers don’t have the capabilities in place any longer to handle consumers’ ire, so consumers get even angrier.
For industries that are about helping customers — whether retail or travel or anything else consumer-facing — the fact that someone can get physically harmed over customer service should be a warning to all. The value equation for retail is out of whack. It needs to be fixed, and it’s not just retailers who need to do the fixing — consumers have a role to play too.
DISCUSSION QUESTIONS: At what point do you think consumers are willing to pay for service? Have retailers gone so far in pursuing low price that they are failing to provide good service?