Unintended Effects on Customer Service

Posted by Barbara Jones on July 30, 2008 – 10:01 am -

BizCustoms views customer service as one of the ways a business practices business etiquette.  BizCustoms recently asked to customer service experts, Bob Hettel and Danny O’Malia to describe for us the unintended effects short term planning can have on customer service.

 

  by Bob Hettel, Owner, Searchlight Solutions:

Short term planning almost always has long term implications. Take the cuts that many companies are currently making.  Companies are looking to cut staff and improve the bottom line.  Many of these cuts are being made in so called “administrative” positions.  While this may look good to a company’s bottom line today what impact will this have on your customers?  What impact will it have on the remaining staff?  Often this impact will take months to become evident. It can show up in decreased morale, increased turnover and ultimately in decreased business.

Take Circuit City as an example, in order to cut costs they decided to let go 3,400 of their highest paid staff.  This looked great on paper – these people were doing the same job as their lower paid counterparts. In reality they let go some of their most experience and best trained staff.  As a result, customers did not receive the service they need.  Customers began defecting to the competition who had better trained staff who could better serve their customers needs.   As a result sales dropped and the financial picture got worse, not better, not to mention the PR nightmare this created.

As Circuit City has shown, the long term implications of short term planning can dramatically affect your business in many ways but none is more critical then how your customers are affected. 

 by Danny O’Malia, Chief Customer Service Officer, Trustpointe 

Short term planning is almost always disastrous when it comes to Customer Service.  Giving good service requires CONSTANT attention and emphasis to the topic of customer service. When companies think in the short term, customer service gets short shrift. It’s not part of the company’s culture—it’s a mere afterthought or platitude.

Want a specific? Let’s talk about product availability in the grocery business. Short term thinking (prevalent in larger, publicly traded companies) demands strict attention to keeping inventory levels at the lowest possible level—especially when that dreaded quarterly inventory comes around. So pressure is brought to bear on Store Managers and Department Heads to lower inventory to levels that will cause excessive (and maddening) out of stock conditions.

The short term result FOR THE COMPANY? Because inventory levels are temporarily low, profits look good. Shareholders are happy (for now).

The short term result FOR THE CUSTOMER? He/she must go to another store to find the product(s). He/ she is probably angry. He/ she is likely to buy more than that one product at the new store. And, since the new store HAD the product, he/ she is more likely to switch his/ her shopping pattern.

The long term result for the company? Likely a loss of a CURRENT customer. Since, to quote Dick Shcaaf, “The best customer is the one you already have,” short term thinking and planning and policy are anathema to Customer Service. And very damaging to the long term BOTTOM LINE as well! And that will lead, in the long term, do dissatisfied shareholders.

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Tags: Customer Service, customer service consequences, short-term planning
Posted in Bob Hettel, Contributors, Customer Service, Danny O'Malia, General |