Why is Customer Service still the Achilles’ heel for the Service Industry?

Recent experience has reinforced my deeply held belief that for many service providers, enhancing the customer experience is the last thing on their mind. But when customer service is possibly the one true competitive advantage you can have, why do so many service providers perform so badly when dealing with their own customers?

We know that competing on price alone can be a race to the bottom where nobody wins, and everyone loses. Competing on technology only gets you so far, especially as we operate in an increasingly open-source environment. And first-mover advantage is not always an option, unless you can quickly recoup the higher investment it takes to be a market leader from Day 1.

I also find it increasingly infuriating that nearly every service provider claims to be poring over their customer feedback, yet their service levels rarely improve. Not only are customers expected to be brand advocates (via social media, word-of-mouth marketing, testimonials, etc.), they are also expected to provide training material for the customer service department (see “Some gratuitous advice for customer service managers – 7 handy hints”).

Last week I had to visit the retail outlet of a major service provider in the communications sector. When I tried to explain how frustrating it is as a customer to discover that the company’s website has different information to what I was being given in-store, I got the following responses:

  • The website is nothing to do with in-store service, and is only there for information
  • It doesn’t matter what’s on the public website, counter staff can only go by the information displayed on their in-house computer terminal
  • If I wanted to pursue the matter, I would have to make a complaint (by phone, or on-line – not in-store)
  • If I was unhappy, I could cancel my purchase and get my money back (and presumably take my custom elsewhere?)

Not one to give in easily, I submitted a detailed complaint on-line. A few days later, I received a call from someone who said she represented the “On-line Support” team. She simply reiterated that the public website was only there “for guidance”, and that the on-line content was managed by a different department. The most accurate information could only be provided at the in-store point of sale. The representative also said she would e-mail the web team, but could not guarantee a response as “they don’t communicate with us” – and this is a major communications business!  (Not surprisingly, the person I spoke to could not appreciate the irony in this.)

Banks, utilities, insurance firms, telcos and government departments are regularly criticised for their poor quality of customer service – from their billing systems, to their habit of building their external service delivery around internal business silos – so it’s somewhat encouraging to learn that one local bank is attempting to address this by providing one customer contact person from start to finish. We can only hope that the idea of consistency and continuity of service will catch on.


3 thoughts on “Why is Customer Service still the Achilles’ heel for the Service Industry?

  1. Australian companies, both public and private, need a crash course from the Americans. The USA are the only ones who understand the value of customer service. For too long Australia has sat back on their laurels because we’re geographically isolated. Those barriers don’t exist anymore.

    • Absolutely – the “tyranny of distance” has been replaced by the “interconnectivity of the internet”….. There is also far more competition and choice in the USA. Problem is, economic structures and political strictures have meant that Australia is under-served by near-monopolistic market players, and for many services we have no choice but to use local suppliers, reinforcing the lack of true competition. The two areas where there has been an injection of competition (telecoms and energy retailing) the market largely competes on price, and less on service quality.

  2. Pingback: Why The Service Sector Lacks Self-Awareness | Content in Context

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