OPINION

3 Industries Where Service Should Change the Equation

Customer service is being touted as a lot of things these days — “the new marketing,” “the new CRM,” even “the new sales.” That’s all well and good, but many customers just wish customer service could be “the new, actually functional customer service.”

The situation isn’t abysmal everywhere; there are notable examples where customer service is executed exceptionally well and results in the kind of loyalty, positive word-of-mouth and increased sales that advocates point to as reasons to get it right.

However, there are certain vertical markets where customer service remains absolutely terrible. In most cases, they are industries where there’s a significant amount of lock-in and the burden of switching is on the customer. These industries have made the cynical decision to put service on the back burner and increase profit margin slightly by increasing customer frustration massively.

Still, areas where there once were virtual or literal monopolies are opening up. Sadly, in most cases, those newly-opened industries still have the same mindset that regards service as a pesky expense.

Any player in these markets that had an epiphany and grasped the value of good customer service could gain a titanic competitive advantage — it could become the only player in its space that was actually a pleasure to deal with. The impact on market share and revenue would be all out of proportion to the investment it would need to make.

These are the three industries where a commitment to service could result in a dramatic competitive advantage:

1. Telecommunications

The classic ordeal of waiting for the cable guy to arrive has only been exacerbated by bundling. Now, thanks to both consolidation and the expansion of cable companies into phone and Internet (and vice versa), customers are increasingly dependent on single companies for their connections to the world.

Yet getting problems fixed is still a trying task for consumers, and the increasing roster of products companies offer has only made their service processes more byzantine. There have been small efforts to shore up visible areas of customer dissatisfaction (like the “Comcast Cares” initiative), but there have been few comprehensive efforts to address the defective service processes that drive people to Twitter in the first place.

2. Medical Insurance

Some of the most patient, knowledgeable and effective customer service agents are in the medical insurance business. That’s because they get a lot of practice. The processes for approvals, denials and coding are so complex and cumbersome, medical consumers can spend a lot of time on the phone clearing up issues introduced by others in the system.

There’s not much incentive for the insurers to clear this up — every time a consumer simply gives up, the insurer profits directly because it hasn’t had to pay something it was otherwise obligated to pay.

However, a profit model built on how effectively you can confuse your customers leaves a big opening for competitors. The insurance company that seizes the moment and creates a rational, easy-to-use system for both patients and providers could develop a reputation that propels it to a leading position in short order.

3. Travel

Travel’s becoming increasingly a do-it-yourself industry: Reserve your air fare online, and throw in your hotel, car rental and anything else you’ll need for a relaxing time away from home. If you want to change your itinerary, though, prepare to see that relaxation go out the window.

If you’ve ever tried to change reservations made through Orbitz or other online aggregators, you’ve probably been subjected to a long series of questions, substantial hold-times — and then a suggestion that you call the airline or hotel yourself.

There are regulations and rules that limit their ability to do things, but travel providers need to commit to taking charge of the customer’s travel experience and be serious about providing the best possible service when a customer calls in. That means that if they have to punt, they should do it at the start of a call.

Better yet, they should hand customers off to the proper agent at the airline or hotel in question. Making travelers feel like they’re cared for even after the tickets have been purchased will go a long way toward encouraging travelers’ loyalty.

In industries like these, where terrible service is a given, even a modest improvement in processes — or at least a customer-centric view of how service is provided — could mean a big boost in customer retention and, as word gets out, in new customer acquisition.

That’s going to take a change in mindset about service and a shift to seeing it as a profit center and not a necessary evil — and that’s a shift that will require a lot of pushing from determined innovators within the companies in these industries. For the customers’ sake, I hope those innovators get to pushing soon.


CRM Buyer columnist Chris Bucholtz blogs about CRM at Forecasting Clouds. He has been a technology journalist for 15 years and has immersed himself in the world of CRM since 2006. When he’s not wearing his business and technology geek hat, he’s wearing his airplane geek hat; he’s written two books on World War II aviation, and his next two are slated for publication in 2010.

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