Poor Customer Service, By the Numbers

I wrote on the Inside CRM Blog not long ago about vertical industries where a modest improvement in service could signify a major competitive advantage. Among those verticals are those serviced by TOA Technologies; this company provides service solutions to telecommunications, cable and satellite providers, and, if these industries really embrace the customer-centric features of TOA’s products, they could solve some of the same problems that have been dogging them for years.

To get a measure of the problems these service providers face, TOA did a survey – “partly to get some concrete data to show our customers, and partly out of our own curiosity,” said Yuval Brisker, TOA’s CEO. The numbers are, sadly, not surprising.

The sample was 2,261 respondents, so the numbers are fairly respectable, and what they paint is the picture of an environment where customers take service very, very personally – as well they should. Taking a day off to wait for an installer means sacrificing some of the compensation from your job – and if the installer fails to show up, it’s stealing time from you that you can never recoup.

Nearly half (49 percent) of Americans have waited for some form of service in their homes in the past six months. 82 percent say they wait on average at least 1 day per year in their homes for service or deliveries. 63 percent wait on average two or more days per year in their homes for service or deliveries.

Nearly one of in five consumers (18 percent) has lost wages (i.e., taken unpaid time off) to wait for the cable guy or some other service in their home in the past 6 months. Another 32 percent have taken a vacation day or sick time to wait for the cable guy or some other service in their home in the past six months

Of those waiting around, a vast percentage has been dissatisfied with how they’ve been treated. 18 percent of them have refused or cancelled a product/service because the service or delivery person was late or didn't show, and 29 percent have left their homes in frustration because the cable guy or delivery person was late. You don’t need a degree in mathematics to see how corrosive this can be for the provider’s bottom line.

And, while they’re losing money, they’re also losing customer loyalty. 57 percent say the company providing the service is at fault if the delivery/service is late or doesn't show; only 19 percent blames the actual driver or service technician.

Here’s the damning part – and where companies should recognize the competitive value of customer service. 37 percent of consumers believe that the standard wait-window is 4-8 hours because companies "take advantage of the fact that people will most likely wait for the service/delivery because they want or need it,” and 27 percent believe that service companies are just “not concerned about the customer's time.”

Now, imagine the investments these companies have made in CRM for acquiring leads, selling to customers, and up-selling and cross-selling products to them. What is the ROI of all those things when a failed customer service experience alienates the customer? It’s actually less than zero if it drives a new customer away.

So why does it continue? Many of these companies are regulated monopolies, which have little real competition, or they present the consumer with a situation where changing vendors is such an onerously difficult task that they remain. Because of these conditions, they fail to recognize (and, in many cases, I suspect actively deny to themselves) that customers really rule the relationship. The moment an alternative presents itself, they’re likely to see a customer stampede. Until then, however, the economical thing for them to pursue in the short term is the status quo.

However, the customer’s power in this relationship is only growing, and it may force the issue, Brisker says. “The expectations of consumers are becoming greater, and more and more of them understand that technology exists to provide good service – they’re getting it from other vendors in other areas of their lives. Also, if customers are displeased, they can now take it out on the companies that displease them via social media. Bad news travels fast, and it’s hard to change perceptions, especially when it exists on a mass scale.”

Some of TOA’s customers are getting it, Brisker says, and the company has done well in selling its products recently. But how much is that the result of a realization that retention (a business need) is critical in the recession and how much of it is about really providing good service (a customer need)? That has yet to be determined.