Excellent customer service: weapon or burden?

How often is excellent customer service a competitive weapon and how often is it just an unnecessary cost burden on the organisation?

When Computer Associates acquired Cullinet and Pansophic and other companies, the customers were in for a shock - the new service levels were a lot less than they were accustomed to. They especially missed field engineers visiting them regularly to make them feel loved. This upset me until I realised there were reasons those companies were so weakened that they got acquired, and one reason very clearly was over-servicing the customers.

I'm reading Total Customer Service: the Ultimate Weapon, W. Davidow and B. Uttal. You are forgiven for not having heard of it as it was published in 1989 (for $19.95, the same price as The Worst of the IT Skeptic; my! how things have changed). The book, strident advocate of top quality service, contrasts AT&T and IBM "which have difficulty achieving consistently good service" against MCI and Amdahl. "Customers are increasingly frustrated and more willing than ever to take their business elsewhere". Not any more they aren't, if that was ever true. In general, across most industries and countries, customers are increasingly buying on price, even before the recession. Unless Western civilisation performs a U-turn, quality will continue to count for less with each passing decade. From Chinese tools to American airlines, the direction is clearly towards the cheap and crappy. Yes there are niche vendors selling to a discerning market, like those who fly Emirates. And there are whole industries proving an exception, such as automobiles. But if we focus on service rather than product, then even the automotive firms don't look so hot.

[Can't resist a side anecdote. Singapore airport, 1990s. American tourists: middle aged, fat, loud, big hair, pastel tracksuits. They are looking at the departures board. "Singapore Airlines? Thai Airways? Oh my Gaaaad, how awful. I'm so glad we're flying United". I guess the burgers and Bud are better.]

Reportedly the old Burroughs Corp [a computer manufacturer, kids] view was that the service level was about right when customers were "sullen but not rebellious". Called Microsoft or Dell lately? Or used just about any web-based service desk (except my mates at WestHost)?

So before we blindly rush headlong into an endless quest for ever better service, let's always ask ourselves what the correct level is. We can have a conversation with the users, or more precisely the customers, to determine what they are preapred to pay for. That is all theoretically well and good but I suspect that in practice their expectations well exceed their capacity to pay for it. For an ICSP (Internal Corprporate Service Provider, an old acronym that fell into disuse because in those days acronyms had to be three letyters, but four is in now - acronym inflation - so I'm reviving it) for an ICSP we are often captive of the customers who will force undeliverable expectations on us. And if the end users are customers of our organisdation then of course they want ti all and thye want it free - they've paid for the product, they don't want to pay for support too.

One group with the answers are - god help us - marketing. Is quality service a competitive differentiator in our market space? Could we make it one? Is our service costing us revenue?

Whether IT is serving internal or external users, the ones who ultimately make the call are not IT. It is up to the governors to decide how much to spend on customer service, and in most cases the answer is "don't overdo it".

Where's it say that in CSI?


Excellent customer service can be either a weapon or burden

Would you rather buy a product from a company with a reputation for excellent customer service or poor service?

The answer is obvious. So excellent customer service can be a weapon. The flip side is that unless it is done right, excellent customer service can eat up so much money that the company fails, though I would like to add that Amdahl did not fail because it offered great service but due to a sluggish, bloated management structure and "me-too" technology.

The challenge is therefore to provide great service at a modest cost and web based service desks, online chat, dynamic FAQ's, etc are all effective tools for keeping the cost down.

That's not to say that they entirely substitute for live, competent support people. But if it's 8pm, I would much rather use a dynamic FAQ to find an answer than wait until the next morning. I would prefer to or submit a question online and attach a file that illustrates the issue than try to explain it to some first-line support drone. I would much prefer to share my PC via logmein, than wait for an on-site visit.

In brief, the low-cost solution is often better than the high-cost approach so the choice of "service-quality" vs "service-cost" may be a false one. In many instances, companies can offer both. Further, some companies are integrating sales into the support operation and making 30+% of their revenue through support. For more on this topic see [http://www.enterprisewizard.com/7-secrets-of-customer-support.pdf The Seven Secrets of Running a Support Operation]

High quality, automated support systems are already cheap and becoming cheaper compared to humans, so the area where you really do not want to "overdo it" is in people and travel costs. It should not be so easy to eat up a lot of support staff time that your customers will never bother the read the manual, but unless you can offer excellent service to customers who need it, you may lose them to a competitor - a lesson than Dell learned after it tried to outsource it's entire support operation to India.

I guess interesting

I guess interesting parallels can be found by replacing 'Service desk' with 'Regular army', and 'Management' with 'Government'

expand on that

Can you expand on that idea please? New Zealand has reduced our military to the point where the airforce is a dozen aging helicopters, the navy has two little frigates and a few fast boats for chasing fishermen, and the army has a few "Light Armoured Vehicles" and trucks.


To extend your comments Skep, I once sat on an american Airlines flight i used to fly twice a week, This particular flight we all got free champagne as one of the stewards (flight attendants) was retiring after 40 years of service, one of the passengers sitting next to me asked why the quality of the airline had dimished so much, why in 40 years had the experience had gone from luxury to one of necessity?

A wry smile crossed the stewards mouth, "we are here to serve." to which the questioner responded "i don't think you answered my question!"...

"But i did" replied the steward, "you wanted cheap, you wanted frequequent flights from everywhere direct to anywhere, never will you choose the more comfortable flight over the cheaper one, we delivered exactly what you asked for, we're here to serve"

And he is right, one of the issues i have seen companies struggle with is being able to say "no" to customers who don't purchase the gold service agreement. Though they seem to be finding it a little easier these days :)

disconnect between customer and user

The crunch comes when there is a disconnect between customer and user (a bit like when your boss is paying for your flights and won't fund busines class on the 22 hour flight from NZ to NY then expects you to get value out of training the morning after you arrive)

At a publicly funded hospital the IT Service Desk worked 7am-5pm Monday to Friday, with only an unpaid volunteer oncall staff outside hours for (frequent) emergencies. One head specialist, managing an entire department, didn't know this and was horrified. What sort of idiots were they providing an arrangement like that? Not their choice - they wanted to provide 24x7 but the hospital management wouldn't pay for it. Management chose the bronze-level service (gravel-level more like) but nobody even told the users, let alone asked them. (The Service Desk staff weren't exactly wildly happy about it either)

NZ to NY: New Zealand to New York

Levels of service

Coincidentally, in the last edition [Sep 2009 - not online yet] of Wired Magazine, there is an article with the title "The Good Enuf Rvlutn" and it points out that digital music (mp3), video cameras (Flip), military aircraft (predator drone) show that "cheap and simple" beats "perfect" almost any time.
The analogy with ITIL and service levels is striking. I was on an engagement with a building contract services provider a year ago, and their sales had dropped by 60%. Their CIO was forced to go for "good enough": just enough service to sustain the productivity of the end-users, but no frills. The airlines are indeed another good example of this trend.

it's the customer who decides

Good enough works PROVIDED that it's the customer and not IT (or the business) who arbitrarily decides what "good enough" means. I've also been involved with clients who took this approach. The efforts that worked involved the customer and kept pace with what customer expectations. The efforts that failed thought "good enough" meant "we" decide and.... 3 out of the 5 failures filed bankruptcy and didn't come out, 1 of the remaining reorganized by getting rid of the stuff that wasn't working and were acquired, the 5th finally decided to listen to their customers and thrive today.

The concept of "good enough" has always been the right approach PROVIDED (a) good enough isn't cast in concrete (b) the other side of the same coin, good enough changes to match changing customer expectations and (c) the organization eventually learns to anticipate the next round of good enough before there are customer issues.

More than 25 years ago I worked at an engineering firm and... Big meeting in Atlanta, GA. The various customer engineering divisions (CED aka field service) were presenting customer satisfaction reports in their area (8 total). Customer sat ranged between 87 and 92 percent. Last to speak/present was the head of CED Atlanta (different name, but you get the idea) who was obviously pleased with his division. He said they had a 98% customer sat rating and... before the sound had died, the VP of Engineering sitting next to me said, "If that's the case we're spending too much money on CED Atlanta." He cut the budget by 15% and reallocated the money to the other 7 divisions -- no overall budget change, just reallocation of existing dollars. We monitored the results and customer reaction over the year, tweaking spending as required.

A year later CED Atlanta's numbers fell to 94% Customer Sat but the other divisions were now in the range of 92 to 94 percent. Instead of the 11 point range there was now a 2 point range. Atlanta area customer barely noticed the 4% drop, but the customers in the 87% group definitely noticed the improvement. Excellent lesson!!! :-)


Bad service is more important

I agree. It is more important to avoid being really bad than trying to be excellent. Really bad service creates lasting impressions and will have negative effects. I studied once the Customer satisfaction of 18 it-units. Two years later all units that were below a certain limit were gone.

The lesson would be that try to find out what is the average and standard deviation of customer satisfaction in your market and stay within one std dev from the average.


a fine line

Good point. I suspect is is riskier and harder work keeping users just off defecting, but we do it to be more efficient. Engineers who invent new ways to put less steel in a structure occasionally get it wrong and make a mess but in general they save money. Depends on the risk profile of the customer (the one paying not the one consuming) as to how close you shave it.

Threshold of pain

Years ago when I worked for an employer (this one a Fortune 150 in the USA). The Director of Worldwide Marketing said: "The object for marketing is to keep the level of disaster below the customer's threshold of pain." it was a good idea that the company managed to do successfully for years. However, they kept getting their lunch eaten by a competitor who thought that "We need to understand our customers' business as well as the customer and build solutions that solve current problems and anticipate the next problem before it causes the customer grief."

I worked for both companies (at different times :-) -- left the former to go to work for the latter). We got drilled in "good enough" at both. Company A, good enough meant minimize complaints; Company B, good enough meant anticipate complaints.

I liked working at B better -- and the company thrived (still around today). Company A merged with another company and some might argue still looking to find its way more than 25 years later.


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