It Bears Repeating: Customer Service Stinks
There is nothing unusual about a research study showing that Americans are unhappy with the service they receive from a wide variety of businesses. What is surprising is that little to nothing (apparently) being done to remedy the situation.
The latest survey, this one conducted by Consumer Reports, found that nearly two-thirds of people have walked out of a store because they didn’t get the assistance they needed. Sixty-seven percent have hung up on a service call before their particular issues could be addressed.
Consumer Reports has come to the conclusion that many companies are more interested in saving money than providing higher service levels. An article on the site points to websites that may make it increasingly difficult to find a phone number to speak to a real person and websites that steer visitors to FAQ sections rather than to personal help. "Although recorded messages insist ‘your call is very important to us,’ many companies are driving a wedge between themselves and their patrons through poor use of technology and inadequate training of staff."
Seventy-one percent of respondents to the survey were "tremendously annoyed" at not being able to get a real person on the phone. Sixty-five percent reached the same level of annoyance based on an encounter with rude sales staff.
Consultant Jack Abelson described service levels in the U.S. as "abominable" and criticized business for not being able to see customer service as "a profit producer."
"There is an almost complete failure to recognize and appreciate the value people can bring to the equation," he told Consumer Reports.
James Surowiecki, the author of Wisdom of Creeds, writing last year in The New Yorker, concluded, "Most companies see it (customer service) as tangential to their core business, something they have to do rather than something they want to do. Although some unhappy customers complain, most don’t — one study suggests that only six percent of dissatisfied customers file a complaint — and it’s tricky to quantify the impact of good service."
Discussion Questions
Discussion Questions: Why is customer service so bad in the U.S. and why is little to nothing (apparently) being done to remedy the situation? Has anyone created a mechanism to accurately evaluate the financial effects of customer service levels?
Customer service was on the wane prior to the recession. When the recession hit, companies cut back further to maximize revenues. Evidently many retailers and service companies don’t believe that the benefits (read profits) from the expense of providing excellent customer service are worth the cost. Until management sees tangible return on an investment in customer service, it will continue to be tangential to business.
Customer service is bad because retail employees are not considered as or trained as professionals. It’s the same reason you get better service in European restaurants where there’s no social stigma about being a waiter.
As long as you hire people on an effective part-time basis (low wages, no benefits, limited hours, split shifts, little advance scheduling and no clear path for training and/or advancement) it’s hard to see how things will ever turn around.
There are also cultural issues. People who shop in stores feel superior to those who work in them–again a function of the fact that retail employees are not viewed as skilled workers.
So…when you take a group of people who may have come to their jobs because they had no other employment options; pay them poorly; treat them poorly; expose them to customers who also treat them like subhumans; and offer them no light at the end of the tunnel…what, exactly do you expect?
My first reaction was to say; “Because we’re stupid!” That’s true enough, but abominable service is an anger problem; in other words a spiritual problem.
Two reasons for that. The first is that based on the theorem that ‘How we are managed is how we serve.’ When people feel mistreated they too often deal with it by mistreating. It is hard for sales people to directly mistreat their manager back so they mistreat their customer which then comes back to hurt the employer.
The second thing we need to realize is the global unhappiness, unrest and irritation is caused because people are not living for their possibilities. The bigger the gap between your reality and your possibilities the greater the angst in your life. If someone has a retail job because that was all they could find and they had greater hopes for their life you can bet they will provide lousy service as a way of expressing that disappointment with themselves.
We can fix all of this by learning how to stop having a “need” or “problem” orientation to how we build our businesses and our lives and instead learn to focus on “possibilities.” Our view of what is possible is pathetically low.
To change customer service, you either have to change the people who are delivering it or change the way it is delivered. Then you have to make the change significant enough to be noticed if you want to change customer perception.
The easiest way to make a noticeable change is to make a tangible change. Amazon did this with a great online model that includes things like “instant chat.” Apple did it with a new retail design that puts people and product in touch with each other in an interactive setting.
Businesses who want to improve their customer service need to identify and make at least one tangible change to how it is provided. One change that gets noticed is worth a hundred that don’t.
Financial repercussions for poor customer service are probably greater than executives are willing to measure. If shopping is difficult, frustrating or otherwise annoying shoppers will either leave…or buy less (just what they think they have to) in order to cope with the store’s failures to delight.
It works well in this economy for consumers in that they learn they can do with less. And it encourages shoppers to try other retailers and online options to satisfy their needs.
I can’t think of anything more self defeating than sending customers someplace else…not because of product unavailability or price, but because the shopping experience has become inhospitable.
Customer service is suffering in the U.S. for a number of reasons, most which start at the top, but overall I believe it’s because too many companies approach the notion of customer service on the defense, rather than to be pro-active, and make customer service part of the offense strategy.
What I find amazing is when 77% of the jobs in the US are Service based (source CIA World factbook) why is customer service or service in general not better? There are two reasons: 1) Customer service is only as good as what the end customer will tolerate. Unfortunately, our society has learned how to tolerate poor customer service. 2) Customer service training and service check-ups are not what they use to be. The first issue is easy to remedy. Stop tolerating poor customer service and be sure and report not only poor customer service but excellent customer service. If employees and companies start to learn what excellent customer service looks like, they are apt to repeat the behavior. The second requires some capital and focus. Stronger training programs, uniforms and consistent check-ups to be sure the service standard is consistent.
If you look at J.W Marriott, the founder of Marriott hotels he did not start in the hotel business, but rather the A&W root beer business. He quickly expanded and added food and then revolutionized the food industry by providing one of the first pull up restaurants near Washington D.C. He continued to grow his empire, but what was always constant was exceptional customer service. Employees were dressed in uniforms and in fact had to pass an inspection before serving tables each day. The kitchen was a work of art and everything was in its place. Not to mention the detail to serving quality food. Needless to say Marriott continued to grow and expand his company and when he turned the reigns over to his oldest son it was a $1 billion plus empire. Even today, when I check into a full service Marriott or Courtyard, I am greeted by someone in a full uniform, name tag and most important a smile.
Customer service is at an all time low in the US while it makes up the largest share of jobs. What this tells me is there is a huge untapped opportunity to gain market share by focusing on excellent customer service.
Once again, another study on how consumers feel about customer service and some retailers “get” it and others don’t. This cannot be a surprise to anyone who pays attention to how retailers do business. I don’t want to be a pessimist, but when will retailers learn that shoppers want and expect good service? With customers walking out of stores because the service is poor or they can’t find someone to help them, it continues to result in lost business. Where is the priority?
RSR has run benchmark studies for 4 years on the in-store experience. This year, like every other, we found retailers DO recognize that they need to improve customer service. This year’s data also seems to indicate that payroll-to-sales ratios are finally starting to stabilize. US retailers spent about a decade (1995-2005) believing that self-service is a reasonable proxy for customer service. It’s not, and they know that now. There has to be a way to re-invigorate the in-store experience.
The outsourcing of call centers to other countries has been nothing short of disastrous. It’s not that people from other countries aren’t intelligent. Of course they are. But English is their second language, they have been given scripts, and that’s what they know to do and say. It’s frustrating.
The “mechanism for measurement” is pretty straightforward–online sales increase far more than offline sales do. As stores become showrooms, retailers get customer service religion. I believe the store is at a cross-roads. One road leads to irrelevancy. The other road leads to a new, fresh in-store experience. Each retailer gets to choose for itself which path it takes.
You’re not the only ones, guys. This problem is international. Here’s my recent (and worst ever) tale of woe–Gift cards ordered and paid for May 13 (with extortionate furniture-related delivery charge rather than simple postage cost) from extremely poor website for highly reputable retailer. Delivery attempted but impossible due to no one being at home; courier refused to accept alternative address until I contacted both Customer Services and PR officer (noting that I am a journalist specialising in retailing).
Alternative address immediately requested and supplied but cards sent from depot convenient to London delivery address to hub and then depot approx 100 miles away, finally put on van for re-delivery June 3 (allegedly) although I had requested refund on June 1.
Customer Services impossible to reach by telephone so called PR officer who claimed she had passed my emails to head of UK sales and head of Customer Care for immediate action. June 6 after several calls/emails I was told cards were not actually delivered as tracking site said but returned to warehouse and refund could now be triggered, to reach my account in 7-10 days???!!!
I will happily name and shame if anyone cares to know who had the audacity to mistreat someone from RetailWire in such a foolish manner.
Boy, that’s the $64,000 question! In my opinion, customer service is bad in the U.S. because too many of the executives that are responsible (ultimately) for customer satisfaction have not spent enough time on the front lines, dealing with the everyday task of making people happy.
Customer service is simple, if you’ve ever done it…or even if you’ve ever been a customer (which is another thing I’m not so sure executives are: their own business’ customer). On the other hand, if you’ve never done it, you’ll never get it.
To me, it’s a very complex issue, but it starts with the above and works out from there.
Truly amazing. How many more decades will this continue? The few retailers that have responded to this perennial challenge have seen a growth spurt and buck the industry sales trends. Apple Store, Trader Joe’s, etc., are a couple of the minority of companies that have taken customer service to great success. Most of the “above and beyond” services that COULD be provided in every format of retail could be executed with little or no additional cost.
Simple training, and daily reinforcement by the store leadership definitely contributes to the ongoing culture that drives or squelches customer service.
In speaking with Guy Kawasaki recently about his new book “Enchantment,” he suggested that the three keys for brands who want to enchant customers are Likability, Trustworthiness and a Great Product.
I’d suggest that the same is true of brands who want to have outstanding staff. Staff have to like working for the brand, they have to trust that the company has their best interests in mind (which isn’t always entirely to do with pay) and they have to have a product that staff are enthusiastic about selling. Put all three together and you’re very likely to produce better service. Take any one of them away and like a three legged stool, it topples.
Customer service in the retail sector is generally poor because store associates are paid minimal wages and given little, if any training. This results in an uncaring attitude and high turnover, which perpetuates retailers’ conviction that investing money and/or time into store associates does not pay off. However, a look at the customer service levels of high-end retailers who give associates a commission demonstrates that compensating associates for satisfying customers (making sales) shows investing in customer service can pay off.
I’ve got to say that my experience is that customer service in the U.S. is not that bad, when you finally get to a real person. In-store, depending on the retailer, it can take a while to find assistance, but I’ve been pleased 90% of the time with the person assisting me.
Online or on the phone (especially) it is a different matter. I think businesses have put in all these phone prompts to minimize the number of calls they actually have to take, which does reduce costs, not taking into account the longer-term effects of annoying customers. But, when you actually get someone on the phone, I find they are usually pretty helpful and bear in mind that they are typically dealing with disgruntled customers.
Bad service used to really annoy customers. Now they have other options, like moving online to the competition. Companies that don’t care what customers think will ignore them at their peril. Shop your own store to get a reality check….
I believe most customers expect great service, but are generally not willing to pay the costs associated with providing that service, at least not at a retail store. It is funny how Walmart is almost always rated the worst in these surveys, but it is number one in sales. While it is unpopular to say it, price still rules for most (70%+?) shoppers, period.
You would think that the online success of Zappos.com and the in-store success of Victoria’s Secret would give someone a clue that their great customer service is a key element of their overall success. Even when it’s proven that customer service returns improvement in conversion, ADS, and UPT it seems to fall on deaf ears. The problem I believe is two-fold; 1) Retailers that do attempt to address the customer experience with service strategies and behaviors designed to wow their customers often fall short by not implementing technology that monitors compliance and success, and 2) Retailers that are in trouble or have lagging sales take the short term fix approach and appease investors and Wall Street by cutting investment in payroll and technology rather than taking the longer view investing in payroll and technology to right the ship.
When you hire, train, manage, and pay at the lowest level possible to the people who are the face of your organization, you get dissatisfied employees who are the true face of your business. They then go on to create dissatisfied customers who will at some point vote to spend their dollars someplace else.
There are of course exceptions, but it is hard to dispute the reality that customer service is quite poor in this country.
we have been advocating associate training layered with incentives for some time in this forum. Is it only the practitioners that are reading here?
I would dearly like to hear from some brands as to their opinion on the subject and intent to stem the flood of poor service.
Do people REALLY want good customer service? What price are they willing to pay for it? Most U.S. consumers subscribe to the “I want it now, for the cheapest price…” Walmart philosophy. Good customer service is expensive. I know, I own a Bridal store. We have slowly built our niche into a successful store, with growing sales, but we are continually frustrated with the “cheapest price” mentality. Our bridal consultants spend close to 2 hours with a bride finding her the perfect dress, which she agrees she loves, in a luxurious atmosphere. Later when following up, the same bride challenges us with a similar or the same product for less she found online or at a discount warehouse. Naturally they want to buy it from us, because we gave them impeccable customer service–but only if we will match the price.
Another instance just happened on Monday: We greeted a bride-to-be for her previously scheduled appointment. We do not allow small children in our bridal area due to the nature of our merchandise. We tell this to every customer making an appointment and reconfirm this with a follow-up e-mail (with a coupon attached, so they will read the e-mail). Our bride showed up for her 2 hour appointment 1 1/2 hours early with 3 children–one in a stroller, one on her hip, and another under 5. We politely asked her if she would like to reschedule her appointment at a time that would be more convenient, as we don’t allow children in our bridal area. She threw a fit and rudely announced that she would never be coming back if she couldn’t have her children with her during her appointment!
So, my question to you: whose standards do we apply “good customer service” to? The bride who doesn’t care that her screaming children are running loose and destroying merchandise, or all the other customer’s who do…. What do I give up to bring my prices down to an online price?
Some great insights here. The fact is that associate payroll is the highest single operating expense in a 4-wall operation and is the constant target for the CFO trying to hit a quarterly profit number. In a weak retail environment, profits come first, people second. People second rapidly becomes a self-fulfilling prophesy as it attracts individuals who are only looking for a job, not a career. Add to that a central office indifferent to on-the-floor realities and the abysmal situation described becomes inevitable.
It takes a really courageous and thoughtful CEO to invest in people first and live up to one of Sam Walton’s primary maxims “your customer will be treated the same way you treat your associates.” Those CEOs that do focus on their people reap enormous benefits.
I am surprised that only 60 or 70% of those surveyed were annoyed at customer service levels in today’s marketplace. Even places that once prided themselves on truly giving excellent customer service have taken a step back. I don’t know if it is budget driven or training driven. I guess it does not matter since both are cash flow driven.
My latest encounter was in a restaurant chain my wife and I enjoy. We had not been to this location recently. They had remodeled. The price increase said it must have been an expensive remodel and we are paying for it. Service was down a notch or two. The usual uniforms had changed to same colors but lower quality. The food quality was even affected. Maybe they are purchasing a grade lower. I don’t know. I do know I did not enjoy the total experience as much and paid more for that displeasure.
The decline in customer service began a century ago with the rise of “self-service” shopping, and initially that was probably a good thing: businesses reduced costs and shoppers got rid of meddlesome clerks; but of course it kept right on going so that even helpful staff went the way of the dodo bird. I think 3 things contributed to that: (1) consumer centric media–first magazines, and more recently the ‘net–have taken much of the product inquiry process out of the store; (2) free ridership: customers “shop” where the staff is helpful (and the prices are higher) but then turn around and buy where the prices are lower; (3) customer service is seen as a cost center, and predictably it has gone the way of many such cost centers (audit, training, et al.)
I hope that nobody is shocked by these survey results, and I hope that nobody really thinks that things are likely to change.
The reason is really very straight forward. The business model of every major national retailer pretty much precludes significant store-level payrolls, and the payrolls that it does support are at wage rates that absolutely precludes professional-level selling skills.
The business model is driven by price. The margins aren’t there to support meaningful payroll levels, whether it’s a big-box discounter or a mall specialty store. It’s all about the lowest possible price point driving the greatest possible volume.
Into this void retailers have tried to replace people with technology of all sorts, and talked themselves into believing that customers found that an acceptable trade-off. Customer’s don’t.
But the industry is trapped. Given the fact that there are so many retailers and too many stores, the lowest price rules. There’s no room in the cost and margin structures for more people, better paid people or more skilled people.
Every major national retailer can talk about customer service, develop new initiatives, and create new training programs. But in the end, they’re not going to add more people, or upgrade their store-level staffs to more skilled, higher paid people. In the end, the business model rules, and the business model is built on price, price, price.
Customer service is so bad in the US because there is nothing in the SELF-SERVICE business model that suggests it ought to improve. In fact, it is basically wrong to expect service in most situations. The reason goes back to 100 years ago when self-service swept the country and, eventually, the whole world.
Self-service means literally that you should serve yourself, so if you are unhappy with the service, retail management is mainly concerned, not with serving you, but with figuring out how they might help you serve yourself better. Given the MASSIVE benefits that shoppers, retailers and their suppliers have obtained over the century, it really is a bit obtuse to complain about the lack of service.
The driving force behind retail today is that billions of people want and need lots of stuff. If you build buildings and put the stuff they want and need into them, shoppers will come and get it, and pay at the exit for the privilege of getting what they want. This system is massively successful. The problem is that too many shoppers, retailers and suppliers have a very poor understanding of how the system works FOR THE SHOPPERS.
That’s right. Shoppers do not know how the system works for them, nor do they have any realistic understanding of their own behavior. That’s why I have repeatedly referred to the store as a black box. If you actually observe and measure what goes on there, you are forced to recognize that a great volume of what passes as “shopper insight” is ill-founded curious imaginings.
Stop complaining about the service while you are carting home the benefits of the self-service world!
In an age where the buzzwords out of every strategy session talk to the virtues of becoming more customer centric, how can it be that the perception of the consumer is entirely the opposite? Could it be that time honored issue of great plan/poor execution, or is it more likely a result of a poor plan that is impossible to execute? The likely answer is that those developing the strategies and those executing them are far from aligned. While the plans are admirable and indeed targeted at increasing value for the consumer they are designed in such a way that it is impossible for operational teams to interpret or execute them.
Think of it this way; In any situation where you received poor service was the individual or system concerned engaged in adding value? The likely answer is no. So what is the answer?
I believe the answer lies in the fundamental concepts of Category Management that lead to a revolution in the CPG world. When used to define & measure the strategic direction of an organization these techniques provide a road map of success for every single stakeholder along the entire value chain. This means that every participant is able to create value rather than subtract value for the customer. Stakeholders are able to engage in creating value and as such become engaged in the process of delivering customer centric service.
I sort of have a different take on this. I believe there is room for many sorts of retailers. Those with high levels of service (Apple and Zappos are my two favorites), and those that have mediocre or even poor customer service (take your pick from the long list).
Good customer service does cost more to deliver. There are customers and products, and combinations of the two, that are highly price sensitive; these shoppers just want the cheapest price for these products, without much regard for service. Another customer may feel differently about the same product. In addition, a person’s perception of what is good service will vary across channels, verticals, products, probably even regions of the country.
A smart retailer will place high importance on understanding the value of customer service, and think about service in regards to their competition and market position. The profitability of customer happiness and impact of service initiatives should continually be measured and analyzed so that the retailer can optimize (not maximize) customer service, just as one would optimize on shelf availability or product pricing.
Some great points made in the commentary and any business in a service-based industry gets what it begets. As noted, treat the internal customer (employee AND management) of the stores shoddily, and the external customer (money in the till) is going to be treated in kind. There is a lack of long-term vision when it comes to customer service evident by the ghost towns many stores are when it comes to staffing. There needs to be less “what makes me look good” decision-making and more “what makes the company look great” decision-making. It’s a farce that “people are the most important resource” in many retail companies and until this philosophy changes, customer service is going to be a hit or miss proposition, which in turn will continue to result in bad behavior on the part of customers responding to bad behavior of employees influenced by bad behavior of executives.