Customer service is getting worse—and so are customers
Rare is the company today that does not claim to be “customer-centric”. Anyone unfortunate enough to have sought assistance or redress from big business may quibble. Many interactions with customer service make you feel central only in the sense of being the prime target of corporate abuse. Such experiences grew especially maddening amid the staff shortages and supply-chain snarl-ups of the pandemic. But trouble has been brewing for some time. After rising steadily for two decades, the American Customer Satisfaction Index (ACSI), a barometer of contentment, began declining in 2018. Although it has edged up from its pandemic nadir, it has shed all of its gains since 2006.
Businesses have long known that it pays to keep customers happy. In 1976 the White House commissioned TARP, a consultancy, to study the state of complaints-handling in America. Among other things, TARP’s report concluded that businesses could profit from investing more in customer service, quantifying for different industries the value that loyal customers create through repeat purchases and referrals. In the years that followed, companies from American Express to General Motors set up contact centres with toll-free phone lines to make themselves more accessible to customers. A new genre of business books extolled the value of customer loyalty. A nascent industry of consultants peddled ways to improve customer-service operations.
“In a well-functioning market, it should be profitable to satisfy your customers,” argues Claes Fornell, architect of the ACSI. What, then, has gone wrong? Increased concentration in industries from airlines and banking to telecoms could be a factor, in so far as market power weakens the will of companies to invest in pleasing their clients. Much of the consolidation in these and other industries, however, occurred before or during the period in which customer satisfaction was improving.
2023-09-28 09:10:08
Original from www.economist.com
