Choice and Customer Service

z12b026 Seth Godin wrote an interesting post about choice the other day. What was interesting is how Seth neglected to mention customer service in the post. He is usually a very pro- customer service/customer service experience guy. However, his point is still there.

Customers have choices. Like Seth mentioned in his post, there are thousands of retailers, banks, mortgage companies, insurance companies, etc. that are just a few clicks away. Pretty much every industry worth being in is super competitive.

That provides a perfect segue into the topic of customer service. If there are hundreds or  thousands and thousands of similar companies that provide essentially the same product or service for about the same price, how do you set yourself apart? Well, customer service is perfect for that.

A lot of the companies I have interviewed realize this. Many of them are in very competitive industries where the customer has a lot of choices. So, these companies made a concise decision to make customer service their competitive advantage. They are hoping (and their success has said they’re right) that when customers have a choice, they will gravitate towards the company with the best service.

For you as a company and as an executive, it is important to realize that your customers have choices. And it is equally important to realize that one of the factors in making their choice will likely be customer service. If you can keep that in mind and continue to focus on customer service, then you should be okay.

4 Responses to “Choice and Customer Service”

  1. Scot Herrick said:

    Oct 11, 07 at 5:34 pm

    The range of what constitutes “good” customer service between companies is pretty amazing. As a consumer, I have consistently steered away from poor self-help systems, people in support who knew less than I did about their product, and help that is scripted.

    Plus, the clear lack of putting the right tools into help centers really hurts companies. But, that is considered a cost and not an investment in customer retention, so there you go.

    I love companies that get customer service. As a consumer, it’s tough to get customer love.

  2. Service Untitled said:

    Oct 11, 07 at 6:41 pm

    Scot,

    Sure is. When a company gets customer service (or at least the person you’re talking to at the company does), it really makes a difference and you can tell. Unfortunately, it is rarer than it should be.

    Good points. Thanks for your comment.

  3. Ankit said:

    Oct 12, 07 at 2:44 am

    Customers don’t always have a choice, so why should a company bother with providing higher levels of customer service?

    Take the telco companies for example – they’re known for horrible customer service, but why should they change? What is their incentive? There is competition, but usually not very many choices to pick from, especially in something like cell phones, where companies such as AT&T have a very large market share.

    By improving, they aren’t going to get more money from their customers, and their competitors aren’t doing much better for the most part. If they spent more money on customer service, sure, they’d get some customers from their competitors, but then their competitors would respond and you’d have a higher cost for customer service than you did before, and because the other companies stepped it up a notch to match what you did, the market shares aren’t going to change a lot. The end result is a higher cost to support customers.

    Why should they bother?

  4. Service Untitled said:

    Oct 12, 07 at 10:24 pm

    Ankit,

    Thanks for your comment.

    That is the obvious downside to monopolies. They don’t have much motivation to provide exceptional service. Companies that don’t want to (and don’t see a need to) provide exceptional service won’t. Companies that are in competitive industries may very well see a need to since they can use customer service to set themselves apart from the competition.


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