Too big to fail? Why do you think big companies get away with poor service?

1. Compelling Corporate Brand
2. Overwhelming Size of Customer Base
3. Simple Customer Entanglement
4. Total Value-Chain Benevolent Entanglement
5. Self Indulgence of Customer
6. Scarcity of Better Alternative
7. Monopoly of Offering
8. Hyperactive Power Influence of Customer Evangelists
9. National Pride
10. Incentivised Shareholding Focused on Customers
11. Differential Management of Customer Touch Point Programmes Thereby Concentrating on Key Influencers.

The aforementioned factors and other pointers aid some big companies to get away with poor service.

Dr Elijah Ezendu
http://advancingci.blogspot.com/
http://advancinghr.blogspot.com/

Sometimes, it's not just about the companies its also about the customers. For them, I think it's a pretty simple equation:
Inertia + lack of competitive choice = ability to put up with poor service

For large companies, if they have been set up to be very product or service focused and not really customer focused then because of their size, management and shareholder priorities they will often find it hard to change. Also, service has traditionally been a cost centre rather than a profit generating activity. Only when large corporates start to realise how great service can influence their bottom line will they start to pay attention and start to invest in service.

Great question.
I probably agree with Elijah's monolpoly. For a long time, there was only one telephone provider or utility in an area. Look at th state controlled 'services' like drivers licenses. You cannot GO anywhere else so you will take what we give you and like it! (Remember, the S in IRS is 'service'. . .) So the provider can 'DO' anything they want to you and even complaining does not help.
Another is the 'cost' of changing. For a long time, if you had a phone number for years, or an email address, the cost of changing it and letting everyone know versus putting up with poor service, meant put up with poor service.

Ignorance, indifference or both. There is no need, in my view, to look a lot further.

--

Ignorance : those in power to make a change (management), operate disconnected from the customer-facing portals, people, or devices (dial 5 for ...)

Indifference : if you have 750.000 customers, in 50 countries, why would you care about the singularity of a customer complaint.

Both: ignorance induces apathy, & v.v.

--

Consequently: the large enterprise model will, with mathematical guaranteed result, over time, undermine itself.

Large corporations will continue growing as long as "economy of scale" will continue to matter. Over time, they will be replaced by small, local units. Small units will care for their numbers, sheer by economy of smaller scale.

Enjoy!

I went shopping the other day at Albertson's grocery store (a big chain in Southern California). Really poor service. Every time I made eye contact with a clerk (I was looking for a product) they would disappear before I could walk up to them. One register open with ten people in line. No "how are you" or "did you find everything" questions at the register. There are a ton of grocery stores around here. I don't need to go back to that one and probably won't.

Went to McDonnalds the other day, through the drive through. Asked for a glass of ice with my order. The window person said "We don't give away ice." Could have said, "Sorry, but... " or anything else. Just... rude. Egocentric I guess? Not like I can't find another place to get a burger. I'm not holding anything against the company or the establishment, but if I'm driving and looking for a quick bite, I'll probably drive past that particular place.

I get great service from Sprint (cell phone) and Wells Fargo. Polite people. Valid answers. Not a lot of hold time. When I hear people bitch about their bank or cell phone provider (which I hear a lot) I always recommend these two places.

Bottom line is that if I get poor service somewhere, I go another place. I don't get angry. A little disappointed sometimes, maybe, like with the ice. There are just too many other places to go. Don't like google? Search on yahoo. Can't find what you're looking for at the supermarket? Try to find a place where there are clerks and stockers in the isles who are willing to help.

Then... there's the utility companies. Only reason these places don't fail is because there is no place else to go. Fifteen and twenty minute wait times on the phone. C'mon folks! Think you're paying too much for electricity? Too bad, ain't it? Not like there's much of a choice. This is a societal problem, though. Has to do with the way things were built up from scratch. Damn, though, this won't last forever. You used to be tied into a particular phone company, for example. Now-days, you can get VOIP or a cell phone from any company you chose. We'll get there, eventually.

Mike

--
Access Database Programming Expert, http://miketurco.com

Great question!

I believe 1. Compelling Corporate Brand & 6. Scarcity of Better Alternative are two of your listed factors that most allow this type of service from companies, but won't dictate whether or not they fail as a company.

If you look at a store like ALDI grocery store. It seems to me that this store can lack some customer service perks more expensive grocery stores offer in order to save and continue passing savings onto their customers. Their customers realize where they are shopping and make a connection that "Hey, they are selling me some CHEAP stuff, so I understand if they can't unwrap some products and just leave that to me because I am gettin' a big-time deal!".

Just signed up for FOCUS.com and your question was the first I read. Good question, I'll follow your blog for tips on providing good experiences for my customers.

Large, so called, too Big to Fail, companies are often national or international in scope. Telecommunications, IT and Banking are typified by these types of organizations. For customers, in BtoB environments, there is safety in staying with the traditional player. In Canada it used to be said, no one gets fired for buying Nortel. But if you manage badly enough you will fail. Customers will leave the large incumbent for an alternative who clearly demonstrates interest in their long term business needs. To compete successfully the company must have a long track record, ability to supply equivalent or identical technology and services (if a VAR), and a modest price advantage. Typically, the alternative is a large local or regional player. To get there your sales team must engage potential customer over time. Consider, offering a local seminar series where education, not sales, is the goal. This will demonstrate your value and build relationships. (Note: do not focus on webinars as your larger competition does that already.) Differentiate on service and you will be rewarded with growth.

Good question, however I don’t think there is a big Company out there that is too big to fail if they continue to offer poor service. I think majority get away with offering poor service due to this simple fact – PAST REPUTATION.

As to why the customer will stay with a provider despite poor service, most have been answered in some way.

Basically we are lazy and it's easier to put up with the poor service than go through the effort required to make the change. (This applies to far more than just poor service)

In some cases there may not be an alternative (power companies) or is there, we just are not aware of the alternatives mainly because that will take time and effort and we don't want to do that.

Complacency, we've always done it this way attitude, once more unwilling to put the effort into change. Habits are hard to break once established. We've always shopped at this store even though the service and selection has gotten steadily worse.

As to a company being too big; no one is too big to fail unless they get massive government bailouts using our taxpayer money. This too will soon be forgotten and the services will get worse.

Yes, big companies do have a significant disconnect with the "customer experience" because the spreadsheet says the time, training and monitoring cost too much and it's only one customer. Oh how wrong they are!

Recently we spoke about Comcast vs. our local Cable Provider.
Comcasts customer service is terrible, but their speeds are blazing fast. Our local provider is Mediocre fast but allows you to speak to real local representatives.

Small & Local cannot implement.
Big & National struggle to care.

I agree with Mik about some companies doing wellat customer service. Sprint has taken a complete shift in customer service. Which part of their problem came from tight regs on their rCS reps. The reps were not given the time, freedom, nor resources to help. In the last few years this has changed drastically.

Give the reps time, freedom & resources to help customers.
Some discounts, long phone calls, & follow ups are appropriate.CSR's will care if they are supposed too.

Of course everyone loves a deal so one does needs to weed out those who just waste reps time kicking tires,etc...

Companies with poor customer service are not too big to fail. Case in point is CompUSA. I was a customer when it was originally SoftWarehouse in Dallas in the 1980's and they sold only software. When they began to sell computers, they changed their name to CompUSA. Their customer service and support were terrific and they were the choice of computer pros and amateurs.

Unfortunately, as they got more competition, their customer service because virtually non-existent. A typically stupid corporate move to save money. By that time, the company had started a rapid expansion across the US. Nearly going bankrupt, the company was purchased by a Mexican company who didn't care or didn't know about the impact of poor customer service. Because of the attitude in the stores, many people I knew, including myself, refused to darken their door. Ultimately, the company could not expand beyond their reputation and lack of customer service and they went bankrupt. They have reorganized and now have several stores again. Have they learned their lesson? I have no idea as I still don't darken their door.

Poor customer service exists because consumers allow it in almost every case. When they finally complain the attitude may be too entrenched to change it. Walking away sends a better message than any registered complaint.