Over the past 5-10 years customer service quality in the day to day environment has been reduced to a bare minimum. The old saying “the customer is always right” is no longer adhered to and it seems that cost is used as the only success factor for a company. I predict that this will change over the next 2 years as lack of differentiation between suppliers becomes more and more apparent to the end customer. By 2017 Customer Service Quality will become the next CEO focus.

Service Quality Today

Poor Customer Service Quality is nothing new. The fall in customer service quality has already been observed some 10 years ago by Dall and Bailine in their 2004 book “Service This: Winning the War Against Customer Disservice”. Unfortunately things have not improved since this publication. A recent visit to a local clothing shop resulted in no purchase. Not because there wasn’t anything of interest but because the staff were more interested in talking on the phone to their friends than helping a customer. Similarly, every time there is an issue with with an internet provider or mobile phone company and a call to the customer care is urgently required, it often results in more frustration than problem resolution.

When flying with a German air carrier recently and missing a connecting flight (subsequently making the entire trip pointless). This was due to plane’s late arrival. 12 months, over 20 emails and combined calls I was finally refunded. Even to this day, not a single apology from the airline. When a recent purchase from an online store didn’t arrive as advertised, I contacted the delivery company only to find out that the driver could not find my address and I would therefore have to collect the package form the depot myself – yet again no apology or trying to amend the situation. This behaviour of not caring, that these individuals are doing you a favour for the customer, this is becoming increasingly more visible across all client facing roles and industries.

This is not confined to Europe. When trying to have a meal in a restaurant in Estes Park, Colorado, I ordered a medium well done steak. When it eventually arrived 50 short minutes later the meat was so hard and so tough that one could use it as a bullet shield! I complained but the waiter wasn’t very helpful, his comment was that this wasn’t his problem. More worryingly the manager didn’t seem to care either. Similarly, when very recently catching a connecting flight in New York I was amazed at the amount of useless staff all over the airport. From information guides that had no clue about anything, to baggage handlers that were trying to check how far they could throw your bag and general staff just hanging around and not doing anything productive or of any real relevance. Similar horror stories can be found in every industry from accounting, via business to business sales, transportation, electronics to travel agents and many others. The question is: Why has customer service quality fallen from grace and why is it so widely accepted?

Why Have Service Quality Levels Gone Down?

To understand the current lack of customer service we need to realise that all business is cyclical. Service quality too, just like any other aspect of business operations, is cyclic in its form. Unfortunately for some reason the last cycle seems to have extended beyond its welcome. There is no single reason for this even though some aspects are probably more responsible than others. The blame cannot be fully assigned to the service suppliers as customers have decided not to do anything about it thus making the situation “OK”. Certain aspects however seem to be more profound than others.

  • Cost is more important than service quality
    Over the years cost has become everything. Unfortunately there is a cost associated to service quality in form of investment in training and time. This initial cost is all too often perceived as unnecessary. Customers accept this situation fearing that any changes might result in increased price. The weird thing is that the perception that “customer service is a cost” is a wrong. Good customer care leads to increased sales and less mistakes. This in turn means lower cost. The fact is that good customer service and general common courtesy costs nothing.
  • Low skill levels amongst the staff
    Low skill level is connected to the cost aspect. Training and up-skilling are frequently removed or reduced to a bare minimum as they are deemed to be an expense with limited return on investment.
  • Lack of care amongst employees – everyone thinks that they are entitled to more
    In today’s society everyone wants more and fast. Most people feel that that the world owes them and it is only due to some cruel accident that they are not on top, where they belong. Unfortunately that means that the staff providing the service are not that interested in providing it as it is just “a temporary occurrence”. They do not take pride in what they do nor do they care if the result of their behaviour affects anyone else. Part of the blame can be accounted to the company itself and how it treats its employees. If the company does not take care of its employees then why should they care?
  • Weak Management
    In many cases the bad customer service could most certainly have been avoided if direct supervisors or managers had acted on what they saw. Unfortunately they do not care, or just do not see what is happening on the floor as they work in their office. When they do their rounds they do not spend time assessing the service quality or employees behaviours. In most extreme cases, their behaviour towards the end customer also leaves a lot to be desired.
  • Inflexible processes and systems
    Many of the business processes and systems in place were meant to create a structure and ensure quality. Unfortunately in some cases, this lead to the process becoming so rigid that any situations that are not covered in system parameters will result in the customer being affected negatively. Coupled with removing any possibility for managers to fix the situation (again by removing their ability to affect the process) will lead to service quality disasters.
  • Changing suppliers is fruitless
    Customers also bear some responsibility for the situation. Too often they accept poor service quality as normal. Not getting the attention from the waiter has become acceptable. Part of this acceptance is the fear of increased price, the other part is a lack of alternatives. Even though we are unhappy with the service, the truth is that it will be the same with other suppliers. At least that is what we tell ourselves.


Why Service Quality Will Be the Next Big Thing

The last 15 years have seen many different improvement areas: product quality, variation reduction, cashflow improvement, waste and cost reductions, and most recently employee engagement. As time goes more and more companies go through similar changes. As a result they become mirroring images of each other. Moving suppliers becomes pointless as the provided service will be exactly the same wherever one goes. As with the cabbage example in Finance 101, the product is well known and there is no real differentiation. Price has become the only attribute over which companies compete.

Unfortunately the ways in which companies can reduce costs further are becoming more scarce. There is a limit as to how much a company can reduce prices before it starts eroding its profits or how much cheaper it can produce. Operational excellence has now been around for a while and Employee Engagement is already becoming the new focus for businesses. Both are addressing costs albeit from different angles and with different timing. However, they are not providing any real long term edge. These cost reduction strategies have transformed from a “competitive edge” to “survival necessity”. Unfortunately there is not that much more that companies can do internally to reduce costs. As this competition area “dries up” companies will have to find different ways to compete.

So far all competition efforts have been focusing on the internal operations, very few on external engagement with the end customer. And when there was an effort to improve customer care, it was usually done half hearted. This lack of focus on external engagement is a fantastic opportunity to differentiate. At the moment this is still virgin territory and as such, it promises some great returns if done correctly. The first movers into this will gain a major competitive edge.

This revolution will probably start in the catering and hospitality industries, where improvements will generate quick results. It will then move on to others. There are of course a few examples of companies with an outstanding customer care already today, unfortunately at a premium cost. The trick will be to remain at the same cost level while giving something extra.

By Peter Kristoffersson