Thursday, October 24, 2013

Saving on Customer Service: How About Losing 6 Trillion Dollars?

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For eight long years, we had the same cable and internet provider, their customer service was bad, representatives were rude, service technicians did not come on time (in spite of the four-hour windows) and when they arrived, they were scarcely able to fix any problem the first time around. And worse: the cable stopped working whenever there was a game! But we persisted: There was just no other viable alternative. The provider and the county had a franchise agreement effectively shutting any competition and so the “oligopoly” persisted. Then we moved and had an alternative, so we changed the provider. Two years later, we are still getting the promotional material from the original provider with promises of great service, discounted rates, and upfront cash-cards – every single week with no break and never a disruption! If only they had shown a small fraction of that dedication/persistence when we were still doing business. 

I am sure you have your own customer service horror stories! It has almost become part of the “corporate folklore” in recent times. Companies have always maintained that moving customer service to China and India, putting voice-controlled systems in place with endlessly looped menus, automated messages that “your call will be answered in the order it was received” and the really useful “your call will be answered in approximately 28 minutes” – has actually saved them monies! In spite of all the anecdotal evidence that these practices resulted in poor customer service and therefore, frustrated customers, no one ever asked: What was the cost of these cost-savings?

But now a study from Accenture puts a number to it, and what a number it is: almost 6 trillion dollars, just so you don’t lose the impact of how large this number is, let us really write it down: $6,000,000,000,000!

Well, not all of that in the US, however, we are not far behind. Accenture estimates that US companies saw business worth 1.3 trillion dollars switched to another provider due to dissatisfied customers. That number represents more than 8% of our total GDP in 2012 (at 15.68 trillion). The worst offenders: Consumer Goods Retailers followed by Cable and Satellite Providers. Accenture reports the following as the top reasons for dissatisfied customers: The worst part, any customer would have told these companies these reasons if they ever cared to ask!

  1. Having to contact the company multiple times for the same reason
  2. Being on-hold for a long time when contacting the company 
  3. Having to repeat the same information to multiple employees of the company or through multiple channels 
  4. Dealing with employees or self-help sites / systems that cannot answer my questions
  5. Having a company deliver something different than they promise up front

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© Vivek Sehgal, 2013, All Rights Reserved.

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