The costs and benefits of letting your customer service slip

When we don’t care about clients, we create a culture of complacency that infects our whole organization

David FullerOne of my in-laws spent two hours on hold with an airline company last week after his travel agent had spent four hours on hold with the same company. When I asked him about the experience, he said he was happy he didn’t have to wait longer and said the person who answered the phone after his wait was excellent.

Recently we stayed in a condo at a ski resort where the service was less than spectacular. Faced with a problem, we called the company, but no one answered. The next day when we phoned again, they sent someone over who said he would be back in a few hours to remedy the problem. He failed to return until we called again the following day.

Even the government, while charging more in taxes, has lowered its standards for servicing clients. An accountant recently told me that taxation department responses that took six months before the COVID-19 pandemic are now in the 10-to-12-month range.

What are the costs and benefits of low customer service?

Benefits of lower customer service levels

Lower costs: Labour is often one of the highest costs for businesses. Lowering your service level by cutting staff can be a cost savings that many businesses will pocket.

For companies that have been hit hard by a changing economic climate due to the pandemic, this might make sense. However, in many cases, the lower service has costs attached that many organizations haven’t fully considered.

Lower customer expectations: If your customers have been expecting high levels of customer service and now you have purposefully cut the service levels, you may benefit in the long run by lower expectations of customers.

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This was the case for my in-law. Only a few years ago he might have been upset to be on hold for 15 minutes. Now, he expects to wait hours.

Less pressure on staff: If your core value was once taking care of customers but has changed to taking care of the bottom line, the pressure on your employees to deal with customers is probably reduced.

Costs of low customer service

More complaints and customer dissatisfaction: If your staff were stressed by the pressure to perform, they will likely be more stressed when dissatisfied customers voice their displeasure. Dealing with irate customers takes a toll on your customer service people, and the result is often job vacancies as these people look for work elsewhere.

Opportunity for your competition: Unless you’re a monopoly like a government agency, chances are your low customer service levels are creating an opportunity for your competition to sell more of their products or services by offering slightly better service than you.

Smart companies focus on understanding the weaknesses and strengths of their competition and in creating value for their customers by differentiating themselves from you.

A culture of complacency: When we don’t care about our clients, we create a culture of complacency that, like a disease, infects our whole organization. Who cares if it doesn’t matter if the customer waits, receives low-quality products or services, or even complains?

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If, as leaders, we create a culture of complacency, we can expect our staff to deliver less-than-stellar results in all aspects of our business. In the end, we have a company or organization where nobody cares for anything except their paycheque and hanging on until they can retire.

Loss of revenue: It doesn’t matter what type of organization you are, every operation that fails to look after its stakeholders eventually suffers consequences. Even governments lose revenue and eventually power when they don’t deliver on their promises.

Businesses face more severe consequences when their customers vote with their paycheques for someone else who offers something of more value for their hard-earned money.

While many companies are satisfied that their lower standards of service will be accepted by a new generation of customers who will pay more for less, the reality may be different. Inflationary pressures are beginning to hit many households in ways they haven’t felt for decades. This will change the way people look at spending their money and the levels of service they expect.

Great customer service may seem like a thing of the past when dealing with larger companies and organizations. But this only opens the doors for others in smaller businesses who are willing to work hard to ensure that customers feel special and are treated that way.

Dave Fuller, MBA, is an award-winning business coach and a partner in the firm Pivotleader Inc. Is customer service an issue? Email dave@pivotleader.com. For interview requests, click here.


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