Some Categories of Customer Service Waste Company Cash

By July 29, 2010

This month's Harvard Business Review reports findings that companies are overcompensating when it comes to customer service. According to research, the article proposes that while customers will go to some length to punish poor se

rvice, customers will not be loyal to a brand solely due to fantastic service.

This trend plays out especially in phone-based and self-service interactions - the largest channels of customer service for most larger companies. In these situations, customers care more about how brands deliver on their basic promises than on how the experience is when customers are using these channels. Because many companies fail to recognize this, the report says, they end up wasting a lot of time and money on investing in unnecessary frills rather than on focusing on ease of use, dependability and similar core customer expectations.

The HBR report's authors discovered findings that they believe should affect every company’s customer service strategy: "First, delighting customers doesn’t build loyalty; reducing their effort—the work they must do to get their problem solved—does. Second, acting deliberately on this insight can help improve customer service, reduce customer service costs, and decrease customer churn."

In real life, this plays out when customers wait in line at an ATM despite there being available bank tellers inside, in one example given in their blog. Most customers do not want to interact when they can just do it themselves.

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