Pure Genius: Get Rid of Customer Service! Here’s Why!
How many requests do you get each week to “rate our service” or “take our short customer survey” via text, email, or while you are on the unending hold line? You probably decline them, but someone must actually complete them, as we hear the advertisements for “Voted #1 in Customer Satisfaction” all the time. Despite the overused tactic, having a high customer rating feels worth bragging about.
Well, like the majority of drivers rating themselves as “above average,” how can it be possible that so many horrible companies get “high customer satisfaction ratings”? Think Comcast. Who are they competing against?
What if that same focus on customer satisfaction will almost surely guarantee that your company goes out of business? Statistically, it’s backed up quite well—that a focus on customer satisfaction will ruin your business in less than 5 years!
What? How so?
The Problem With Focusing On Client Satisfaction
Companies seem obsessed with tracking their client satisfaction numbers, as if that insures repeat business, or makes them immune from a recession.
Problem is, the repeat business oftentimes never arrives, despite customers declaring that they feel “satisfied” with the product, price, and or delivery of the service in question.
Take Groupon—a company whose model we all know.
You buy a 10 session hot yoga class, or 2 for 1 entrees at a local Thai restaurant, and you save money by utilizing the discounted Groupon model. Good for you for letting out your inner frugality and showing it in public! Freak flags are allowed by our Constitution, and the frugality freak flag is universal.
Question: When the 10 yoga sessions have been used up, are you satisfied? Yup. Nice enough location and facility. Good yoga instructors. Nothing by relatively positive things to say. You declare your satisfaction…and at a great price. Perhaps you actually did the yoga classes only because the price made it affordable enough. Even better!
Same deal with the Thai food place. Good food. Casual atmosphere. Local draft beers on tap. Great deal, using your Groupon. Nice to have a great dinner out.
Despite being “satisfied” do you still frequent the yoga place any longer, now at full price? How about the local Thai restaurant? When you needed to pay full price, did you readily return?
If you’re like most consumers, you will give high “customer satisfaction” scores and go somewhere else next time. The reason is simple. You can simply revisit Groupon and purchase another (different) yoga package at a severely discounted price, and find a great Vietnamese or Persian restaurant to try out, rather than paying full price to reward the discounted offer to whom you rated highly!
In short, consumers have been well trained to look for lower delivery price and/or higher quality, which was much more difficult to do just 10 years ago. Your business gets great customer satisfaction scores and drops profit margins! Even worse, your business might be forced to keep the repeat customer if and only if you continue to honor the severely discounted price offered through a coupon or Groupon offer. That is the worst case scenario, as you are forced to work below a profitability point, or lose the customer. Yuk!
Sometimes it sucks to be you…or at least to be your business. Perhaps even worse, the momentum in this direction is increasing, rather than decreasing.
So If Not Customer Satisfaction, What Instead?
Take another company that we all know and use, namely Amazon.
Ever heard Amazon advertising their exceptionally high customer satisfaction ratings? I never have either. Instead, they offer us something consistent in the experience to bring us back…at their price, not a discounted price.
The big difference is that Amazon holds directives that their entire team employs, that insure the experience is worthy of customers coming back again and again. Every experience fits the directives and is completed (in almost all instances) at a profit to Amazon and/or their affiliated suppliers.
If you’re like me, unless it’s absolutely necessary, I never shop anywhere but Amazon, as I can be done with the entire shopping process in a minute, with a great price, never leave home, and I get free shipping, with a 100% return policy that they pay for! Beyond that, the shipping occurs most times in two days, and I very little time and no gas to leave home.
The yoga studio and Thai restaurant also do a pretty good job at what they do. Amazon insists that each team member play according to well articulated, simple directives, unlike the smaller, less sophisticated businesses. These same directives are targeted internally, at the Amazon team, and the end result is that the customer experience is exceptional.
Am I a “satisfied” Amazon customer? No. I am a very profitable (for Amazon) repeat customer, as I only shop elsewhere when what I am looking for does not exist on their site.
Repeat customers are worth having. Satisfied customers put companies out of business!
Here are just some of the directives that the Amazon teams adhere to, followed by a short translation of what that looks or feels like for their repeat customers:
|Amazon Directive||How This Affects the Customers|
|Invent and Simplify||“Make the process work for me!”|
|Hire and Develop The Best||“Everyone I speak with wants to be working at Amazon.”|
|Insist on the Highest Standards||“Start at the top, rather than at mediocrity or at the bottom.”|
|Think Big||“The experience keeps evolving and improving.”|
|Learn and Be Curious||“They listen and ask questions.”|
|Earn Trust||“They take on one for granted.”|
|Dive Deep||"They work hard to create a great experience.”|
|Deliver Results||“They make things simple for me, the customer.”|
Amazon does not ever toot their horn over their market share, customer satisfaction ratings, or their own time delivery process. They simply deliver what they promise—cleanly, quickly and simply, where I know when their package will arrive, and how to return it if it’s not right—all conducted in dozens of countries, with a plethora of items that you could ever find under one roof. Simple. Well priced. Delivered as agreed, with a free shipping label back if the product is damaged or not what I wanted.
The end result is that Amazon is a behemoth, and we want it that way. No customer satisfaction. Extremely high customer loyalty, which is far more valuable in the end.
Thai Food Tastes Even Better When It’s 50% Off!
Just like you, I love a great deal. That great deal always comes with my sincere appreciation—for the product or service, for the people who prepare and deliver it, and always with a heartfelt “thank you” expressed.
Sadly, for the Thai restaurant, that appreciation paid for at a 50% discount does not come with any reasonable prospect of me ever coming back…before or after my significantly discounted hot yoga class!
Your business is just the same. Customer satisfaction will get you a satisfied customer. Hooray! Customer satisfaction will not necessarily get you a repeat customer, which builds your business. Another company will almost always be willing (and able) to deliver your same service cheaper, faster, or more effectively, even though you have high satisfaction ratings. Ugh!
The result: you have to discount to compete, or customize your service in some way in order to differentiate. Your profit margins decrease, and in the end, the viability of your business ends up at stake…all the while chasing satisfied customers.
Specialize, Customize and Charge!
Rather than satisfy your customers, in the virtual marketplace that exists, you have two great choices: you can specialize the experience (and charge for that) or you can own a specific niche market (and charge as well).
Volume rarely insures success. Just ask Walmart, who is closing 220 stores due to lower than expected sales. Discounting simply begets additional discounting, as you literally “teach” your customers to desire your product only at the “sale” price.
Specialize, customize, charge for it, and create delighted, repeat, profitable customers.
And when asked, decline to take the customer satisfaction next time. It only insures that the business in question is tracking the wrong metric.
All the best!