Why is good customer service so under-rated?

Once a week I receive a circular from Virgin Media that goes straight into the recycling box, unopened. This gives me great pleasure. I guess it must be costing Virgin Media perhaps 20p a shot, or about £10 a year, and they have been doing this since 2007. This comes to £50 and counting. It is, in my world, about the size of ‘fine’ that I am levying on them, and it is the only way I have available to exact some kind of retribution for intolerable customer service. I should explain.

There was once a company called Videotron, which was the original cable TV provider in my area (the UK Cable Authority eventually licensed 136 such franchises throughout the country). Though part of a Canadian outfit, the London activities were reasonably small and local and provided good service. The world changed when many of the franchises were authorized to provide telephony services (and later broadband) and so started the series of rapid amalgamations that saw my provider taken over by Cable and Wireless. Costs rose, presumably to fund investment that didn’t particularly interest me, and quality of customer service sank. This was nothing to what was to follow: my local franchise fell into the hands of NTL. I say ‘fell into the hands’ because of the arcane rules that existed. It was simply not feasible for new companies to lay more fibre optic cable at that time (I think because the franchisee had exclusivity for a period of years) so the only way an operator could expand was to take over existing systems. Usually, acquisitive monoliths leapt in at this stage and the original idea of ‘localness’ was lost in favour of ‘more efficient’, combined call centres.

NTL was truly appalling. I do not doubt that technically it was proficient enough, but the quality of customer service plummeted to levels that now provide case studies for those who provide courses on the subject. During the early 2000s, two websites were set up by exasperated users in an attempt to shame the company; this must rank amongst the first reasonably successful attempts to use the power of the internet to alter appalling company behaviour. (The websites were ntl:hell and nthellworld). In my opinion, the company was not only badly run but had seriously overreached itself, and one of the few ways that ‘savings’ could be achieved was by culling the ‘expensive’ customer service function. My own issue with them was not a very complicated one (and not of my making) but took months to sort out and finally I told them to go away and never darken my screens again. NTL was so incompetent that I eventually resorted to writing to their company secretary before I got anyone to listen. They couldn’t even be bothered to collect the abandoned kit. I vowed to share my experiences, lest others were tempted to join them. I am a person and I will not be treated in this way by incompetent global technocrats that are not interested in their customers.

The company had borrowed far more money than it could service and eventually filed for bankruptcy protection in the US and a refinancing deal that saw its former shareholders lose most of their value (I expect they felt they should have put competent directors in sooner), but this failed to stem plans for world domination and in due course they took over Virgin Media. Since Virgin had a good name for customer service, and NTL the opposite, the enlarged company rebranded itself Virgin Media. I took the view that on the cable side it was largely the same people (Virgin had not previously been involved with cable), and that I would continue to express my contempt for a thoroughly greedy and disreputable organization. Hence my pleasure at costing them £10 a year. It is a truism that it is much easier to retain a customer than to get one back once they are lost. I may go back one day, but if I do, I can say it has cost you £50 cash to get me back as well as several thousands in lost revenue, and if you had been a competent organization you wouldn’t have lost me in the first place.

Virgin Media (ie NTL) is about to be taken over by Liberty Global. I expect we will all be told shortly how exciting this will be, and how all our lives will be made better by further globalization, placing our daily digest in the hands of a company I dare say few people in the UK have ever heard of. I just hope it initiates the final clear out of former NTL marketing gurus, thus wiping the slate clean – well my slate anyway. I might then start opening their junk mail, and I might eventually conclude that my present BT deal is less than hilarious and feel it was high time to teach them a lesson!

Lest anyone should think I am naturally inclined to vent displeasure about everything, I do try to be even-handed. For example, I happen to favour ‘Judge’ cookware. It cooks evenly, is easy to clean and is (so far as I have been able to ascertain) nearly indestructible, even in my hands. There was an occasion when a lid-handle became loose and it was evident that it was in some way defective. With unreasonably low expectations, I contacted the company and received in the next post a new handle (of improved design), at no cost to me, plus an apology for my inconvenience. I was delighted. This little gesture probably cost them about a pound. What an investment. It kept me as a customer from which they have probably benefited by a hundred pounds or more and I recommend them at any opportunity, so possibly others have been swayed to look in their direction at their excellent products. They could have taken the NTL approach and made contact with them next to impossible, spares hard to get, sought to charge me an amount I would have resented paying deeply, and let me go elsewhere for my purchases (which is what happened when I sought a common spare part from Philips, a company technically good but I fear may now be losing the customer plot).

None of what I have said is in any way difficult to grasp. Surely, nobody is really interested in my own, unique, view? No, of course not. But actually lots of people do this kind of thing, if gossip in pubs, restaurants, coffee bars and dinner tables are anything to go by. Experiences both good and bad are widely shared, and, maybe unconsciously, when decision points arise over a choice of product, we do recall that someone we trust said ‘such and such was good’ and ‘so and so gave endless grief’. Other factors being equal, which would you choose? With millions of the chattering classes chattering more furiously, and widely, than ever, I would argue that reputations do matter more than ever and that once a brand is damaged it is extremely hard (‘expensive’, in business speak) to rebuild it. Marketing people call this kind of people-based, positive endorsement process ‘viral marketing’, but it cuts both ways. The business challenge is that the costs of a dedicated customer service team are all too visible, while the subtleties of what they do are much harder to quantify (and so in a downturn are harder to justify).

To me, keeping customers a firm already has must surely be the hallmark of a good, well run business. However, there is an alternative view, which is potentially rather worrying. I read a letter in a management magazine (which annoyingly I now cannot find) suggesting there are companies that actually set out to provide rotten customer service on the basis there is limited competition and that providing ‘churn’ doesn’t exceed a certain percentage it may be cheaper to live with it than to be nice to customers. I cannot show my contempt enough for such cynical and disreputable behaviour (if it is true), but anecdotally there is evidence that certain large companies, perhaps in the power and telecoms areas, all behave so similarly that there is absolutely no practical choice to be made between them. Consumers merely drift between their number, ever more disenchanted with the lot of them. Certainly that has been my experience with Orange, another formerly excellent company that has sunk to the level of indifference through growth. They only want to have a conversation with me when I threaten to leave, when all becomes sweetness and light (but only briefly). It is a numbers game, and individual customers appear to be no more than a pain in the neck! By the way, in (I think) 1998, Mannesmann purchased Orange for £19.8 billion, equivalent to £5000 a customer. You would think they’d be trying quite hard to listen to those customers and keep them happy, rather than successively reducing the features they had originally signed up for, which is what actually happened. Not so! It was a strategic move to fend off Vodafone and the customers were in a sense utterly irrelevant.

In small companies with short reporting lines then it is likely that customer service will sit close to the company’s executive management. In very small companies they will be the same people. Thus the management gets to hear very quickly when things go either right or wrong. If something is wrong then there is an immediate learning opportunity that can help prevent it going wrong a second time, and also an opportunity to turn a potential disaster into a PR success. Being close to management, small companies are usually better at redress when something goes wrong. A manager can say “sorry, we’ll make sure it doesn’t happen again” because he or she has the power to do so. They can also say “sorry, have this one on us”!

In large companies, those actually dealing with the customers are far removed from the management process; they may not even work for the company and thereby have no stake in the outcomes. Those running call centres can often not deal with the issues fully, let alone investigate root cause and prevent recurrences. Management has no immediate feedback about even quite common issues. Often, only trends can be monitored, as previously loyal customers flee to competitors (if there are any); of course, once this is happening, it is too late. Nor do those remote from management usually have the power or authority to make individual and appropriate redress, let alone fix systemic problems. This, of course, makes things stressful! Nothing like having to listen to ranting customers without having the tools to fix the issue.

In physics there is a very common phenomenon called hysteresis. This basically describes the application of a force and the lag before there is a visible effect. This has an immediate parallel in customer behaviour. However dreadful the customer service might be, the outcome is usually confined to feeling annoyed or general grumbling, coupled with a feeling that complaining won’t change anything, the alternatives are just the same and changing will be irksome. These may or may not be accurate or well informed responses, or even rational, but that is how most people behave most of the time. Every now and then, something worse than usual is experienced (or the usual is experienced, but on a bad day), and all hell is let loose as years of frustration are released. Letters of complaint are fired off, ombudsmen are called to assist or, heaven forbid, we tell the supplier to get lost! For every occasion this extreme is resorted to there are dozens of other occasions when we just let matters pass. Suppliers know all this. They can probably read you the exact statistics and predict exactly how often this will happen to an ‘average’ customer, and cost it into their plans. There, that makes you feel good about how much you mean to your supplier, doesn’t it? Ah, you’ve left us: actually we thought you ought to have done it last month! Hysteresis, as you will have gathered from my NTL experience, works both ways though.

Complaints ought to be regarded as an opportunity for managers to discover something about the way their business is run so that they can improve (and I bet many of these wretches have ISO 9000 whereby continuous improvement is a requirement of retaining the quality mark). Furthermore it is a symptom of dissatisfaction which if not dealt with will result in customer loss. In safety terms, it counts as a near miss. For every complaint received there are probably ten dissatisfied customers who did not complain, denying the opportunity for fixing something. For every ten complaints you will lose a customer. Deal with complaints properly and you fix all kinds of things. Complaints should be embraced (provided management can be part of the process) and companies should not stick an ineffective call centre in the way. That just makes things worse.

Somewhere in all this is the thought that those who run larger companies should actually use the services they offer. I cannot help but think that if a time-poor managing director tried to deal with one of his (possibly her) own call centres and had to hang on listening to endless messages saying how important his call was, and barbaric renditions of ‘the four seasons’, whilst paying for the connection, then certain of the companies would improve overnight. I am not the only one who has suggested that some companies actually choose to delude themselves about the quality of customer service given because the alternative is simply too painful.

A fascinating article in a recent technical magazine listed a number of communications service providers in diminishing order of their reputed quality of customer service. The interesting point that was made is that the ones with materially worse service were offering cheaper deals. It is conceivable that they were cheaper because the customer service people had been culled and saved money, but far more likely, the author suggested, that the worse performers had to offer cheaper deals to overcome reluctance to sign up because of poor reputation. That immediately gave a clue to how to attach a value to a good reputation! It is an exceedingly valuable thing. Why do so many companies throw reputation (for which customer service is a good proxy) away so easily? I can only think it is because they are not very well run. (This is an abhorrent thought, but having seen so many previously good companies self destruct, it is a plausible conclusion and I don’t just mean the banks). 

The most soul-destroying aspect in all this is how powerless consumers feel. The only language that companies understand, ultimately, is what the bottom line is telling them. However, those who understand and interact with (and even like) customers get a useful insight into what their bottom line will be telling them in the future if problems are identified usefully in time to take appropriate action, and they can do that by listening. If companies either loath customers or won’t listen to them, then adverse changes to the bottom line come as a surprise, usually unwelcome.

Personally, I see the advantage of some of the modern communications systems that actually give customers enough power to fight back and make these monoliths listen. My advice, therefore, is to tell everyone you can about notably good service and notably poor service and if enough people do this fairly, honestly and frequently enough, it will in due course have a positive impact. Otherwise set up an ntl:hell type operation. After all, it is ultimately our money that is funding all these people. Time, methinks, for customers to be heard, and listened to.