We are now a full month into the New Year and I have noticed a significant and measurable decline in the approach and support of Customer Service.
To be more specific, we went back into the last 16 Business Acumen simulation sessions we have delivered for our clients to measure the trends of investments participants have made in the function of Customer Service to see if there was any data to support a thesis of continued diminishing investments leading to poor business performance. What we found was very interesting. During these last 16 Business Acumen workshops which include programs in healthcare, process manufacturing, financial services, and high tech, the average investment in Customer Service decreased by more than 28% across all participants and all workshops.
During the same time, we saw increases in investments for:
- R&D (32%)
- Marketing (22%)
- Sales (14%)
- Operations (2%)
This data got me curious, so we went back 5 years to a pre-pandemic environment to see what the data was. Unfortunately, we didn’t document the more than 400 Business Acumen programs we delivered in 2018, but I was still able to log into about 30 different simulations as a frame of reference and the average Customer Service investments were about +3.4% during a simulation workshop which typically averaged about 3 years of running the simulated company.
While not perfect science, a swing of over 30% is significant.
Bad Real-World Experiences
No matter where we all go in the world it seems that Customer Service is dead. What prompted me to think about and write this blog was a terrible experience I had at a global Printing & Shipping shop. (I am not going to mention their name because this isn’t about them, it’s about Customer Service and the Business Acumen lessons we can all learn from having poor Customer Service.)
I was delivering a great Emerging Leaders program for a group of really smart managers just coming into their own and building their Business Acumen skills. For the simulation portion of the learning, we created several “wobblers” which are extraneous events that occur in the simulated environment forcing participants to deal with the issues and circumstances. In order for me to pull off one of the wobblers, I needed to print 40 copies of a press release announcing a major catastrophic industry event. So, I went online and sent the print job to the local store and was told it would be ready at 5:00 pm which was in 2 hours.
Not knowing where the store was or how long it would take me to get there, I left at 4:30 pm and arrived at 4:45 pm. I walked into the store and one of the workers looked up from the desk and say, “Yeah?” Not, “May I help you” or, “Hello”, just a “Yeah.”
I informed the gentlemen that I was picking up an order for Brodo. He lifted his head and uttered some words that I still can’t believe, “You were supposed to be here after 5. You are lucky I finished this job early.”
I am “lucky” that he did the work I was paying for, “Early.”
It was a complete joke. Luckily I had already paid for the work online so I picked up my package, thanked him for his “hard work,” and vowed that I will not use that company’s services again.
I am sure I am not alone.
The Business Acumen of Poor Customer Service
Based on how people are addressing Customer Service in our simulation workshops and based on the countless examples of poor Customer Service, I think it’s fair to say that Customer Service is dead.
Here are five Business Acumen issues with the current state of Customer Service:
- It will lead to a loss of customers. Loss of customers will lead to loss of revenue and loss of profit.
- It will increase costs. Poor customer service leading to losses of customers will also lead to more costs in terms of trying to replace those customers. One of the most important rules of business is that it is way more expensive to bring in new customers when you lose them than to invest in customer service to keep them
- It puts more pressure on the other functions. Lack of investment in Customer Services puts more pressure on Marketing and Sales and they too will reach diminishing returns.
- Poor Customer Service will go viral. It’s not a matter of if, it’s a matter of when. When it happens, it will be bad for business for many years to come.
- It will decrease shareholder value. Shareholder value is a function of revenue, profitability, cash, and most of all happy customers. Unhappy customers will certainly lead to deceased shareholder value very quickly.
In summary, it’s time to rethink your customer service strategy. Eliminating costs by not training or replacing people with bad AI is not the answer. Having well-rounded Business Acumen skills and the knowledge to make the right investments in Customer Service is the only way to move forward.