Dear Manager,

Perhaps one of the greatest areas of evolution in business is the tenet of customer service, which I have discussed on occasion in this management letter. Yes, we’ve all endured less than inspired customer service in recent years. Yes, we will admit that its significance will only continue to grow as the economy recovers. While many continue to talk the talk, there are still those who just can’t walk the walk.

I continue to see evidence of less than stellar performance. With all of the discussions regarding its importance, and the clear and obvious need, why are we still having this conversation? Could it be a conspiracy? While kidding, there are times when even this doesn’t seem too far-fetched!

In my review of many institutions and corporations, I have come to the conclusion that many are in total darkness with regards to their ultimate customer. While they may indeed “talk the talk” with their management and shareholders, in reality they simply don’t want to allocate the resources to provide effective customer service. In many instances they are not only getting away with it, they are flourishing in this environment.

This is where it begins to get scary. These companies and industries, directly or indirectly, have come to the conclusion by their actions (or lack of actions) that they simply no longer have to care about true customer service! You must understand that I’m becoming a generalist in this view, but it’s too often true. How is this possible? Let’s look at examples where this may be the case, then examine the corresponding impact on our priorities and perspectives on this topic.

I believe it all begins with a mentality established years ago by our utility companies. While their monopoly is now in transition, over a period of years their approach to customers was to provide service “on their terms.” Effectively, they owned us as a customer; the rules of supply and demand provided very few options for the consumer.

Our only position of strength was with the regulatory commissions. And how many of us have contacted this “watch dog” recently, let alone in our lifetime? The only customers that the utilities had to please at a very personal level were these regulators. Have you ever tried to work out what should be a simple problem with a utility company? We have evolved from being a customer to simply being a user.

Users and Simply Being Used

As we look beyond utilities, let’s focus a bit closer to home by looking at companies and institutions that make significant impact in our lives, yet have no monopolistic grip on their users. This type of company, including banks, mortgage companies and insurance companies, relies on the initial contact and sale to develop long-standing and “convenient” relationships.

Certainly there’s very heavy competition in each of these areas. Yet for most of us, it would require one of these institutions to hit us over the head with a ball peen hammer to bother to make a change. We are simply too busy to worry about these seemingly mundane aspects of our daily lives. Sign me up and let me forget about it. This is exactly what these types of companies are banking on … mortgaged against and insured upon!

Once you’ve signed up, have you noticed how difficult it is to get their attention? Their attitude can be one of superiority, with very clear rules, policies and hoops to jump through. Have you noticed how few bankers actually reside in the local branch of the larger banking institutions? Don’t dare ask for service or, God forbid, a personal discussion with the individual approving the loan. We have seen steady increase in the number of independent community banks in our region. Their success and growth in the market place has been significant because they provide service and personal contact.

We have all tried to contact a major bank or our mortgage and insurance companies by phone. With fifty layers of options to choose from, the hope is that you will figure out your own problem long before you have figured out their phone system. It’s very simple: if the process is difficult enough for our customers, they will simply quit calling to pester us.

These industries and others rely heavily on the initial sale, with little or no responsibility after the initial conquest. They rely on actuaries that determine they will lose only a minor percentage of their customers regardless of their customer service efforts. You and I become no more than an annual annuity for these institutions.

The Difference Between “The Need” and “The Nod”

I feel these major institutions have skewed our perceptions on common sense and simple courtesy with regards to ones sense of priority to the customer. Once again, they simply don’t have to in most cases. As long as we get an occasional “nod” we will accept their terms of sale. This personal convenience quotient holds significant power in our behavior.

The problems begin when this mentality and acceptance begins to seep into more conventional business and personal relationships. In a recent conversation with a doctor, he was discussing how wonderful his profession “used to be.” He can no longer look at his patients as clients. His true customers are the insurance companies, HMO’S and Medicare, as they hold the purse strings to 80% of his income. These institutions effectively control his earnings, and the decisions he must make regarding patient time in the hospital, prescriptions, rehabilitation and convalescence. Second generation suggest these controls affect staffing, time with patients, further education, facilities and state of the art equipment.

I recently heard a radio commercial that caught my interest. An auto body shop was extolling its ability to truly meet their customers’ needs. They suggested that studies have shown four out of five consumers do not recognize whether their auto bodywork has been properly executed. Combine this with the fact that once again 80% of the repairs are paid by insurance companies. Who is the customer? Will these repairs return your vehicle to its original condition, or simply repair it to the standards established by the insurance companies? I’m afraid to even touch the analogy regarding auto repair and human “bodywork”…

In the consumer products industry, this customer service mind set simply won’t due. With most of our products, our customers make a conscious decision, whether or not we have cut the mustard. Instead of a placating NOD, we must earn our stripes, because we NEED our customers.

So why do we continue the need for consistent conversations with our staff regarding proactive customer service? Because we are fighting a culture that is confronted daily with something much, much less. I believe this “user mentality” continues to compete and conflict with our own efforts to establish a very high standard of customer service.

There can never be enough discussions within our companies about very personal customer service. While this relationship has become blurred by other industries, it is our paramount job to bring crystal clarity with regards to its priority, daily. Our lifeline is in the hands of our customers.

I recently saw a television ad for Ameritrade with the byline: “Customer service doesn’t begin until someone answers the phone.”

Personal Regards,


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