WHAT HAS HAPPENED TO CUSTOMER SERVICE?

© Rene A. Henry

If we’re in a service economy, where did the service go? Customer service are two words that soon may no longer exist in Corporate America.

The problem is not new, but in a society where rudeness is rapidly replacing common courtesy, customer service is simply getting worse every day.

Customer service consultants say that a company has performed service when it exceeds the expectations of its customer. Many customers would be happy if just their expectations were met.

There still are a handful of companies that set examples for outstanding customer service: Nordstrom and Neiman-Marcus in retailing and Ritz-Carlton and Hampton Inns hotels. Hampton, a member of the Hilton family, introduced the industry’s first “no questions asked” 100 percent satisfaction or no pay guarantee. Hilton could learn much about customer service from Hampton.

Before the industry was deregulated, airlines competed to offer the best possible service. All fares were the same. There isn’t an airline in the U.S. today that I could give above a failing grade for customer service.

A Business Week Reader Survey in 2002 reported 77 percent of more than 400 people who responded said their customer service experiences over the previous year were only fair or poor. The people had little patience with bad service and 94 percent said they stopped using a company’s products or services after a bad experience; 57 percent said they don’t give a company a second chance.

Shareholders of public companies should be concerned that dissing customers means lost sales. Several years ago, McDonald’s reported that rude employees cost the firm an average of $60,000 per store or a total of $780 million in the U.S. alone for its nearly 13,000 restaurants.

Companies that excel in customer service can charge more for services. Dallas, Texas automobile dealer Carl Sewell did not sell on price, but service. His philosophy was to turn the one-time buyer into a lifetime customer. Sewell instilled in all of his employees that the customer is always right, even if he or she is wrong. He said to always underpromise and overdeliver, and when the customer asks, the answer is always yes.

A customer service role model could be the late Lord Taylor of Taylor Woodrow, a British conglomerate involved in everything from building nuclear power plants and the English Channel tunnel to land and housing development in the U.K., U.S., Canada and Spain.

During a cocktail reception, Lord Taylor was confronted by a friend about his customer service problems. The next day an edict went out to all employees that any complaint would be sent directly to Lord Taylor. Failure to do so would result in immediate termination whether the employee was a secretary or president of a division. Because of his hands-on management style, within months complaints virtually disappeared.

American Airlines says it knows why we fly. They don’t have a clue why I fly because, according to Steve Larnes in the “executive office,” any correspondence to management is answered by his office. “Our managers are too busy with more important things than responding to customers letters,” he told me. When the airline’s customer service does respond by e-mail, it blocks any reply by the recipient so the only way to communicate back with the same person is by letter.

I question exactly how serious American Airlines is about customer service. In the October 1 and 15, 2005 issues of its in-flight magazine Chairman and CEO Gerard J. Arpey used his column to pitch new members for the Admirals Club. During this same time, Arpey closed the new Admirals Club in the Seattle-Tacoma airport. He should have been more enthusiastically honest to the customer rather than honestly enthusiastic in his sales pitch.

Another CEO who doesn’t respond to mail from customers is Stan Sigman of Cingular Wireless. The response comes from someone saying they are in the “office of the president.” But what can you believe? Sigman’s office is in Atlanta, Georgia and the respondent is three time zones away in California! Why not just tell the truth?

Author Tom Peters called 13 firms to pose a basic question or file a complaint. His research turned up everything from great service to being transferred to a non-working number or being cut off. When he called Nordstrom and asked to speak to the CEO about a problem, in an instant then-CEO Bruce Nordstrom was on the line, listened patiently and promised and did resolve the matter.

However when he called Yoplait to know the yogurt maker’s stance on bovine growth hormone the operator refused to transfer the call. The same question asked at Ben & Jerry’s brought an eight-minute response from the public relations department on why the additive was shunned. He wanted an annual report and information on the IBM annual meeting but a helpful operator turned into an automated response and the information arrived two weeks after the meeting.

Customer service will only begin to improve when customers start being more vocal and demanding and when CEOs and senior managers place a greater importance on reading letters and listening to their customers rather than on their bonuses and stock options.