Does Anybody Care Who Killed Customer Service
I feel fortunate that my career began when customer service was still so automatic and pervasive in the marketplace that it was rarely even a topic of discussion. Just as no one wakes up in the morning and says, "Wow, this air I'm breathing is really great," it was rare to hear "Boy, you guys really know how to take care of a customer."Smothering customers with service was an absolute threshold element in the success of any business. Without it, all the product selections and low prices in the world would not save you from failure. Humans take breathing air for granted, and in those days, customers took good service for granted.
All that began changing in 1975, which I mark as the beginning of the end of the Romantic Age Of Retail. This paradigm shift was also the beginning of the end of customer service in America.
Who Killed Customer Service?
For everything we know about our products, pricing, industry, etc., we should know even more about the concept of service, and the role it plays in the success of our small businesses. One of the best ways to accomplish this is to understand what has happened to customer service in the past 25 years.
Just as Julius Caesar died at the hands and daggers of several Senators, I believe the same can be said about customer service in America. Here is a list of three of the co-conspirators, each followed by the opportunities created for small business.
The Crass Age Of Commoditization: Twenty years ago, a soy bean was a commodity and a personal computer was an exotic, almost magical wonder. Today, a PC is virtually a commodity, and I'm not sure what any of us would say was a magical wonder. The good news is our quality of life has improved as innovative products have become readily available to more people, which can only happen when commoditization happens.
The bad news is that in order to deliver all of the products we crave - from jeans, to microwaves, to computers, to cell phones - in commodity quantities and at commodity prices, something had to give. That "something" was service. You can't deliver retail at wholesale margins, while at the same time delivering old-fashioned customer service.
Advantage: small business. In the years since 1975, with so many of the things we use becoming commodities, you would think this would create a hostile environment for small business, since we cannot compete in the commodities marketplace. Ironically, the Crass Age Of Commoditization has created unprecedented opportunity for small business.
The laws of economics make commodities and service mutually exclusive; you simply can't have both at the same time. Let the big guys have the customers who buy on price alone. But, while the big guys are fighting each other in the commodities war, you should be scoring sales by delivering your products to those who must have, or simply prefer, customized service.
Wall Street Greed: There was a time when a public corporation gained and maintained market-share, and therefore, profitability, by delivering good value - quality products, at a fair price, combined with good service. Corporations that made significant long-term investments in employee training and building a positive corporate culture were more likely to be profitable, and consequently, were rewarded with positive stock analysis. This long-view management approach is "the dog wagging the tail."
Since the mid-70s, corporate management's "view" has been getting progressively shorter and shorter. Mergers, acquisitions, corporate raiding, and consolidations have been at historic levels. Investors had already become more impatient for increases in share value when only 20 percent of Americans were invested in the stock market, but now with almost 50 percent of us investing in stocks, pressure for performance has reached critical mass.
Once all of the efficiencies have been maximized in an operation, the only thing left to do is sacrifice, and the sacrifice de jour for corporate America has been customer service. Sacrificing service for short-term performance is "the tail wagging the dog."
Advantage small business: As long as corporate America lets Wall Street's tail wag its dog, small business owners will have a gift. Because the only thing that we can compete on - service - is the one thing our big competitors have sacrificed to feed investors' greed. Happy birthday. You actually operate in a marketplace where you can be the recipient of statements like, "Boy, you guys really know how to take care of a customer," plus the resulting customer loyalty.
Good Deflation: My friend, Gary Shilling, wrote a book titled Deflation. Two of the things Gary wrote about in his watershed work are bad deflation and good deflation. Bad deflation is when any number of circumstances creates diminished demand, and rising inventory levels cause prices to fall. The overbuilding of office or apartment properties will cause rental prices to fall, for example. Bad deflation usually corrects itself in time.
Good deflation is when technological improvements and increased productivity combine to lower prices. I paid $500 in 1989 for a cell phone. In 2001, a much smaller and more productive cell phone cost me $50. There now are even disposable cell phones. Good deflation.
While good deflation is good for consumers, it's a roller coaster ride for the big guys. The prices of many of the things that define them - their products - keep going down. As prices decline, margins decline, and gross profit levels can't be maintained. As GP declines, more sacrificing occurs.
Advantage: small business. Has the value of service ever been deflated? I don't think so - at least not in my 30+ year career. Indeed, the value of our prime product - service - gets more valuable every year. That means small businesses who understand that they are in the service business first, and their industry business second, have a huge advantage over our big business neighbors. And if you know something is going to continually increase in value, isn't that where you want to invest your resources?
Does Anyone Care?
Yes, your customers care about service. People not only still want world-class customer service, many, in fact, must have it. There is an entire segment of our population who don't have the time to do without it. And that's good news for small business.
Does this sound familiar?
• You purchase a fast-food meal from one of the International chains and no employee actually ever looks at you, let alone says "thank you."
• You make a purchase at one of the big box companies and leave with the feeling that no one there cared that you came, let alone that you come back.
• You call a customer service phone number and find yourself in voice-mail hell, or hang-up after what seems like an hour on hold, all the while being told "your call is very important to us."
As a consumer, such treatment is sad at best, and maddening at worst. As a small business owner it's a gift, and validation of our decision to invest in employee training, a positive culture, and delivering world-class service to our customers.
Write this on a rock... Customer service lives; It's alive and well in small business. Our challenge is to make sure our customers know this. When they do, we gain a competitive advantage over the major corporations who killed customers service in their part of the marketplace.
