Monday, March 28, 2016

What's Happened to Customer Service?

Understanding your customers is becoming a complex task for most organisations in the 21st Century; not just because market segments have become a highly complex multi-dimensional matrix of customer types – but because most organisations no longer see customer service as a primary factor in organizational growth – more as a minimalistic requirement in their quest for profit maximization.
This approach to customer service has been developing since the 1980’s – when organisations started to take advantage of ‘customer loyalty’ built up since the end of the Second World War. Once an organization has a loyal customer base – it’s easy to see how some high ranking individual with dollar signs in their eyes – could see this group of people as easy prey for making a quick buck – and hence the slide in customer service began.
Of course the customers partly encouraged this behavior because, even when they suspected the world might have changed and that they were now being fleeced for their money, they still kept loyal to the brand. Some customers might send letters to the CEO expressing their dissatisfaction – but as long as they received some potentially believable apology, they would quickly forgive and continue their loyalty – because for years prior to this they had received great service and quality, so how could this have changed.
Customers just didn’t see the complete change in business and the associated ethics and didn’t realize that the quest for long term sustainable success and growth through dedicated customer care was a business school theory rarely practiced in the ‘new world.’
Generationally this had a huge impact on differing customer views to purchasing and the concept of loyalty. The young generation – not used to doing deals on a hand-shake and the concept of customer loyalty – entered the world of consumption like a duck to water, not expecting good customer service and quality products, and just looking for the best deal. They knew how to use ‘new’ technology to find that best deal and simply felt this was how business is done, and how it should be done.
The slightly older generations – those now in their 50’s and above – still remember a time when being someone’s customer actually meant something and hence many of these customers still long for those good old days – and in a way, with today’s seemingly constant market volatility – so should today’s organisations.
Customers are your business – they define your growth, your profitability and your sustainability – everything else is developed around them. This current short term view to business – brought about in no small measure by greedy shareholders has not helped anybody – and definitely not the average shareholder, looking to make money over the long-term not the short. In fact the only people this new approach to treating customers has helped is the institutional investors who don’t give a damn about anything more than making more money today than they did yesterday – regardless of whose expense that comes at. It’s not that they just don’t care about organisations, they don’t care about their employees or their customers – they just care about making an extra buck – whatever the cost of that buck might be to ‘normal people’ through their long term savings or pension schemes.
In this global business environment what today’s organisations need, as well as the countries they service in terms of taxes and employment, is sustainability (it doesn’t even need to be sustainable growth). To have sustainability you do have to have the right product at the right price, and to be innovative in your offerings, in terms of future needs – but what you should also want is a loyal, ‘sustainable’ customer, who will stay with you on your journey and during that journey help attract new customers to your products and brand – offering a win-win for everyone involved in the business process.
Michael Porter wrote about competitive advantage in his book of the same name – but few organisations consider competitive advantage any more when it comes to their strategic thinking around customers and customer service. Maybe it’s the fault of their boards or their advisors, but industries with high churn rates, like telecoms, energy and even gym membership – seem to be significantly more focused on short-term profit maximization that long term sustainability – much more than creating that elusive concept loyal customer in the 21st Century.
Organisations through their CRM strategies have turned today’s customers into what they are – it’s not the customers fault – they are what business have made them to be.