Customer Service in a Service Organization: Why don’t they “get” it?

By: Ann Middleman,  Principal,  ADM Marketing & Research Consulting,  Westbury NY and past president IABC Long Island

Most businesspeople have acknowledged, by now, the importance of customer service. While Randi Busse of Workforce Development Group could tell you more, it seems to me there are two huge benefits to providing good customer service.

  • Good customer service yields repeat business. Even when there’s a problem, people are usually forgiving when they perceive that someone is listening, and trying to make it right. They will then continue to buy that brand.
  • Happy customers are your best salespeople.  This is even more true in the age of social media and “word-of-mouth marketing” on steroids. The converse is true as well: unhappy customers are your worst nightmare.

Consequently, the return on investment in customer service is significant. As true as this is for manufacturers, or “product” companies, it is even truer for service providers. Makers and distributors of products have something tangible to sell; service providers have ONLY service. So it amazes me that so many service providers are so clueless about customer service.

I recently had three incidents with service providers that made me wonder who was running those companies, and why they seem to take a penny-wise-and-pound-foolish approach to their customers.

  • My oil burner went out when the temperature outside was 11 degrees. It took the service person 16 hours to get to us, and when he arrived, he complained to us of his long work day. I asked him why the company didn’t staff up (which seems perfectly logical to me) during the cold weather, when any child would realize there would be more service calls. He gave me some “party line” answers, and then revealed the real reason. The company is unionized. It is in their interest to keep the staff lean so they can get overtime.  And management doesn’t mind because it saves them money.
  • We went to Florida on our annual trip to visit relatives and friends, and reserved a car at Budget. Again, it was a busy season for rental cars in Florida. We arrived at the desk, paperwork in hand, only to find 5 out of 10 stations staffed. The line was long, and got longer while we waited. And then one rep left (either it was her break or her shift ended), which screamed “I really don’t care at all if you are inconvenienced.”  Finally, it was our turn. I didn’t ask the representative why the counter was so understaffed because I didn’t expect him to have an answer.  I concluded that (a) management doesn’t want to spend the money to staff up for busy times even if it turns some people off; or (b) they can’t get people to work for them because they don’t pay well or don’t treat their people well. Either way, this is short-sighted management.
  • We finally arrived at our timeshare—a Wyndham property—at the stated check-in time, but the room was not ready. Again, we waited about a half hour, as did several other people. We were given no explanation. When we got to our building, there were no available trolleys to take our things up to the room at first, but then a staff member found one for us (kudos to him!!). We loaded it up and attempted to bring it up to the room, but the elevator went out. We walked to the other end of the building to get another elevator, which turned out to be too short for the trolley. Finally, we settled in, when another couple opened our door, thinking it was theirs. We then discovered that OUR key cards no longer worked. The front desk had invalidated our keys and given the room to someone else! We went back to the check-in office and cleared it up. Once again, management is far more concerned with the short-term bottom line than with building the business, a more long-term strategy. And then they want us to come to an “owners meeting,” which is a euphemism for a sales pitch. I don’t think so.

Service businesses are labor intensive, and the margins can be slim. I’ve worked in two such businesses, and I understand the concern with margins, as they support administrative and marketing staffs, as well as facility maintenance and improvement (where applicable) and of course investor return. However, such short-sighted management often leads to deterioration of the brand, and ultimately, the company itself. A more long-term strategy tends to result in brand-building and greater demand; and therefore, larger profits. In this era of social media, when brands can be “slammed” on Facebook or Twitter in an instant, paying attention to customers and keeping them happy has never been more true.

About the Author

Ann Middleman is a marketing research professional who formed ADM Marketing in 2002 to help companies become knowledge-driven rather than assumption-driven in order to make better,  more strategic marketing and business decisions. Using well designed primary and secondary research techniques, Middleman provides data-driven analyses for clients in medium and large businesses. 

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