Why Is Customer Service So Hard?

There's almost nothing about front-office business processes that is easy. In the back office we can more or less expect that automation will have desired effects, such as faster turnaround, greater efficiency, and cost cutting. But applying those ideas to front-office strategies invites questions of how they will affect customers. Will customers respond positively as we hope or will some unforeseen issue rise up and knock down our efforts and even possibly be counter-productive?

There is a flood of great research in the business journals and pouring out of CRM practices that offers all sorts of help. In the past few years they have included, stop trying to be all things to your customers; hire this kind of agent not that kind; get specific automation; enhance your corporate culture; adopt these metrics. The list is long, and so is the list of vendors prepared to sell something that they claim helps in one or more areas.

Automation trends offering omnichannel, multichannel, and account-based marketing, as well as cloud computing, mobility, and analytics, have at best brought service contentiousness to a stalemate between titans. But everyone takes a hit when some legitimate story about customer abuse goes viral, as happened recently when an airline reneged on one of its basic promises.

Service is a money-losing proposition that vendors would rather fund as minimally as possible, hence the trend toward automation. Alternatively, they'd really like it if at some point they could perform some service jujitsu and make a sales pitch at the same time.

If the business journals are to be believed, customers can be an ornery group, impatient with waiting, inexpert when using online self-service, and expecting near perfection in execution. Often, expectations are not set well and one or both sides develop very different understandings of the value proposition.

What to do?

The happiest customers I see are those who subscribe to products as services for a couple of reasons. First, they know they have the power to leave at any point and so perhaps feel empowered. At the same time though, they also know that switching has costs, and, therefore, they will make an effort to avoid divorce if possible. They also tend to be savvy users of technology, and don’t often get frustrated with something that is more or less intuitive.

Vendors have the same issues in mirror image. It's expensive to recruit customers and doubly so if they have to draft revenue simply to replace what walked out the door over who-knows-what issue. Early attrition actually loses the money spent for onboarding. So subscription vendors—the good ones at least—don't let themselves become complacent. They treat any encounter as if it was a service encounter, and they leverage data and analytics to discover better information about customers and their use of products and services that can result in retention.

Even that situation is far from perfect, but it brings into focus an answer to my original question—Why is service so hard? Of course, there's no right answer or one that's 100 percent accurate, but I'd say from what I've seen in subscriptions that when each party feels on the same level, when each has skin in the game and wants to make the relationship work, service gets a bit easier. It's the relationship that matters and that should be no surprise in an industry that has the word as its middle name. It's also the reason I counsel my clients to consider the subscription model even if they aren't subscription vendors.

There might be no reason to develop a subscription business model but all the reason in the world to act like a subscription vendor. Curiously, that subset of our industry has done a lot to train customers to expect different and better things from vendors or brand relationships. They know when they are in a subscription relationship and when they aren't, and judging by my unscientific survey, I'd say the subscription model is the new default mode.

Denis Pombriant is founder and principal analyst of Beagle Research. Prior to that, he held multiple sales and marketing management positions in emerging companies. In 2000, Pombriant joined Aberdeen Group and held positions as research director and vice president of the CRM practice. His latest book, You Can't Buy Customer Loyalty, But You Can Earn It, is available here.