Why are businesses failing? It’s not the economy, its bad customer service

On a daily basis, I marvel at how bad customer service has become today. Business owners blame the economy for their failings, but the reality is that customer service sucks. I have had several bad experiences in the last month, some of which I have already blogged about. Unfortunately, bad customer service stories spread 10x as quickly as good one. And now with the advent of social media, a local business can be destroyed online via rating sites like Trip Advisor or Yelp, or simply by comments in Google or on a Facebook page.

So what is the problem? I believe that the problem is simple – front line employees are not empowered to make simple and reasonable decisions on behalf of the customer. Imagine a Telus employee in a store telling me that they can’t lend me an iphone for several weeks until the new ones come out because my phone died. I have been a Telus customer for over 10 years and my company also uses Telus. Imagine the potential loss over something so simple. Fortunately I contacted the Telus head office in Vancouver and was treated like a king. They apologized, sent me a new phone by overnight courier and now I rant and rave about the amazing company that Telus is.

Just take a look at the above graph. 85% of you’re business could be lost to customer service. It trumps all other reasons that people switch from one brand to another including price which is less of a factor than you may think. Jan Carlson is a Swedish businessman and was the CEO of Scandinavian Airlines from 1981 – 1994. He coined the term ” touch points ” and said that we have 50,000 moments of truth every day which means every time an employee came into contact with a customer. Those moments of truth determine a consumers next step.

What really drives me crazy is the above mentioned line. When employees of a company follow the rules, they will always fail. Employees need to be empowered to make decisions that are right for the customer, not the company. When the girl at the Telus counter says, ” There is nothing I can do” it is a mistake. When the customer service people at Apple hang up on you, that’s a problem. The term empowerment originates from American community psychology and is associated with the social scientist, Julien Rappaport. Empowerment is simply trusting your employees to make the right decision.

I must finish with the company who has the worst customer service that I have ever experienced in my life. Apple. My iphone got hit with the grey screen of death several weeks ago – the screen bleeds grey and the phone becomes unresponsive to touch. I have spent several hours on the phone with different Apple customer service people and I am not sure who trained them, but it has been a disaster of epic proportions. I asked for compensation for monies lost without a phone while on holidays, and have been rebuked at every step of the way. They have hung up on me twice, but the best part was when one of them said, after 30 minutes if exasperation, ” is there anything else I can do to help? ” to which I replied ” you haven’t done anything in the first place” Apple customer service sucks. I wonder what Samsung has to offer?

Check out my new website http://www.badcustomerservice.ca

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