Customer Service At Any Cost?

I’ve written on this topic a few times.  And those posts have elicited their share of visceral reactions from my colleagues in customer service circles.  But as much as I’m an advocate of the customer experience, I’m also a pragmatist and someone who believes that business decisions that don’t make financial sense don’t typically forecast a long and prosperous lifespan for any company.  Call me crazy.

So, two stories this week made me revisit this topic.  Not to prove my point, but to hopefully continue the conversation.

Firstly, when I heard Borders Books declared Chapter 11 bankruptcy a few weeks back, it didn’t register as that surprising to me.  In my mind, it was just another victim of a literary industry that had failed to reinvent itself in the face of radical upheaval.  But then I caught a couple of tweets this past week pondering why this venerable customer service all star could have fallen so hard.  In reality, I have no idea why.  Actually, I had no idea Borders even had such a customer service reputation.  I haven’t stepped into a book store for several years.  But I can suppose.  And, to the title of this post, I’m supposing that whatever the service experience that was being delivered was quite possibly out of alignment with the current economics of this particular industry.  Just guessing here if this was the case with Borders.  But, you can have the greatest return policy and allow your customers to lounge in your brick and mortar store until closing time.  But, if fewer and fewer of those customers are walking through the door, and even less are ringing the register, no level of white glove service is going to matter.

In a more personal experience, I was witness to a scene on Friday night that made me ponder a presumption I’ve challenged in the past; the presumption that the customer is always right.  I’m not expecting a warm a fuzzy reception to these comments.  But, I was at my local Applebee’s Restaurant with my family.  And for those with whom I’m friends on Facebook know, I’m there more often than in my own kitchen.  During dinner, I was eyewitness to a group completely take advantage of the restaurant and their server; complaining to the manager about the server to receive a discount on their tab, then afterwards laughing about it, with one saying to the others “I do this all the time.  I told you it would work.  You just need to know what places to go to.”

Is the above perhaps an extreme example?  I don’t think so.  In my business, my clients are constantly challenged with consumers attempting to extract coupons or free product by filing false complaints.  These consumers, much like the group in Applebees I assume, know that many companies believe its generally better for business to send a coupon or write off a twenty dollar tab than, especially in a world with twitter at the ready, it is to suffer the wrath of a brand attack that could go viral.

So, is the customer always right?  If you provide an exceptional customer experience, does that justify the financial house of cards required to support that white glove touch?  Should every customer be treated like a V.I.P.?  On that last one, I’ll share the most elegant definition of CRM I’ve heard yet.  “CRM means treating different customers differently”.

As a customer, what is your responsibility?
    

Comments

  1. As a post script, I thought I'd add a little color to the Borders issue. And for clarity, here's what I meant about misalignment of the experience delivery with economics. I wrote a while ago about the American Booksellers Association suing Amazon, Walmart, Target and, yes KMart for predatory pricing on books. The ABA's claim was that these big retailers where squeezing out the small mom and pop bookstores. Well, yea! I argued. If that's who mom and pop think are their competition. As in that case, mom and pop's energies were misdirected. Because of their economics, they these bookstores have a unique opportunity to reinvent their value proposition. Its not about selling millions of books on the cheap. Its about creating an in-store experience that appeals to the bibliophile. Why this works is because the economics of these stores provide the platform for this model to work.

    In the case of Borders, that same approach is not economically sustainable. Boarders has massive fixed costs. High cost real estate to support. Huge commitments to publishers to move product. Offering a library where customers browse and then make their purchases on Amazon or B&N; dot com leads to the current mess. And, by the way. BN already did this. Borders did noting to take this concept to the next level. Also, BN invested in on-line channels, eReaders, etc. So, where a BN customer comes in and buys a coffee and browses. He's more likely to make a purchase through one of BN's integrated channels.

    Thats the difference. Borders didn't innovate. Didn't understand its customers and couldn't adapt to economic change.

  2. Bruce
    I have read your previous post on loyalty and not this article that was RT-ed by great #custserv folks I follow.
    I greatly appreciate your critical take on things – you recommend a balanced strategy based on the market realities and customer segments as opposed to generalizations that recommend customer service at all costs.

    Your article reminded me of a NYTimes article on a Backup business that is struggling to deliver same great service to all customers ( http://boss.blogs.nytimes.com/2010/03/11/can-we-afford-to-continue-serving-small-clients/ )
    Regards

    -rags

Speak Your Mind

*