Column: Don’t haggle – customer service is good for the bottom line

October 31, 2012  |  Jack Bensimon  |  Comments

Why make customers fight for good service?

Our most recent Bensimon Byrne Consumerology Report takes a hard look at customer service. Not surprisingly, expectations are high and delivery is often weak. I say “not surprisingly” because it’s conventional wisdom that customer service in Canada sucks. We measured the gap between expectations and performance in 37 categories. Thirty-six fell short.

Some of the biggest disappointments were in the obvious areas: government, airlines, cable and telcos. But with customer service falling short in virtually every category, it’s worth asking why. After all, our study also showed that while 56% of us have ended a brand relationship because of poor customer service, 43% have sought out a brand because of someone else’s positive experience. The business case for customer service ROI should be irrefutable.

Is it simply a case of “You can’t please all of the people all of the time?” An executive at a courier company once explained to me that with more overnight deliveries than all competitors combined, a 99% success rate for each would still produce more people unhappy with his brand every day. Yes, there is some mathematical inevitability to customer dissatisfaction, but it hardly explains the huge gaps we found in many categories.

Could it be our expectations are simply too high? Well, banks top our list when it comes to the importance of customer service.

Ninety percent of Canadians regard it as “very important.” At 85%, pharmacies and table service restaurants are also in the top five. And yet, when it comes to meeting those expectations, pharmacies, banks and restaurants rank 1-2-3. Clearly, inflated expectations are not the problem.

Our data analysis team wondered aloud why businesses simply don’t invest more in training. But the reality is, it’s not entirely solvable with training. At some point, hands are tied. The problems customers experience are also a product of the business model. My original business partner, Peter Byrne, tells a story that many years ago an agency presented ad ideas to the president of a car rental company. Air conditioning was not yet standard in all vehicles. But this company’s fleet came fully equipped. So the recommended headline was “free air conditioning on every rental.” The president was aghast. “It’s only free if they ask” he explained. Why forgo a profitable surcharge on every single rental?

Haggling for Service
The souk, or bazaar, is a Middle Eastern concept. If you’ve ever visited countries like Morocco, Iran or Turkey, you’ll know how foreign this retail concept is to North American culture. Everyone – both buyers and sellers–expects to negotiate. No sale is transacted without haggling. This is not how brands typically relate to North American consumers. Only in the purchase of homes and autos is negotiation expected, and even then many people dislike the process. As consumers, we are taught to shop around, compare prices, research our purchases and make informed buying decisions. The inputs to our value equations are different than those in a souk. When you haggle, movement away from the seller’s offer imputes value. In other words, value is derived through the bargaining process.

Basically, haggling is emotional. And in comparison, North American value equations are more rational. Except when it comes to customer service.

Suddenly, it’s as if we’re transported to a souk, where customer service is available, but only if you negotiate for it or, more accurately, fight for it.

When a nearly new washing machine breaks down, the first call to the manufacturer informs you the one-year warranty expired six weeks ago. The
second call results in an offer to replace the parts, but not the labour. The third call nets some portion of labour, but with a multi-month back order on parts. The fourth call reveals the back order is the result of massive failures of your particular model. Frustration mounts. Tempers flare. Social media is engaged. Negative reviews abound. Brand image plummets. And then, and only then, does something resembling a solution materialize.

Maybe in another culture this would be a moment of triumph for the consumer. “Look at the customer service I got! They’re going to send me a new washer!” But in Canada we don’t expect to fight for customer service because we don’t expect to haggle when we buy things. The front end of the brand promise–what we get, what we pay—is not open to negotiation. So why expect us to bargain for the back end of the brand promise: the ability to fix, replace, return, simply change our mind or, in the case of services, to have them delivered as promised?

Canadian consumers are happy to shop in a mall. Unfortunately, too many businesses want us to go to a souk for our customer service. It’s a culture clash that will only be resolved when service is provided in the same manner the product is sold.

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