No Lines, No Waiting

Making it through the downdraft, part 3: customer service matters.

Got an email today from MITSloan Management Review, and a great item caught my attention as I browsed through their site. It’s a video interview with Prof. Martin Roth, of the University of South Carolina’s Moore School of Business, by the Wall Street Journal’s Jennifer Merritt.

Roth reviews strategies companies use in a downturn, including cutting quality and customer service, and observes:

“They backfire because they’re really, in the end, not meeting customer expectations. Companies have to remember that although times are tough, and customers are concerned about their wallets, and companies are concerned about their budgets, markets continue to be competitive, and customers continue to have lots of choices of different products and services in the market.

“So … when companies decide to cut back on customer service, what may once have been a key differentiator for them brings them down to a parity level, or perhaps even worse. … It becomes much more difficult to re-convince customers that they should pay a premium.”

I found myself thinking “I hope he brings it home with a real-world example.” He did:

“Circuit City… fell drastically behind Best Buy in customer service while Best Buy was making important investments, putting support systems in place for staff…”

I know it’s a tough call for management, balancing cost controls against long-term impact. We face it too: we’re being prudent, but we’re not cutting back on keeping our customers happy. There will be an end to this downdraft, and we’re not letting anyone steal a march on us.

This is a time for companies to demonstrate that they know what their value is, not gasp for air – and certainly not make their customers gasp for air.

p.s. This is the coolest video platform I’ve ever seen: it includes subtitles so you can mute it and “listen” without disturbing your neighbors. In English or Spanish.

Posted by Dave deBronkart