Customer service is free

Most large organizations would disagree.

They hire cheap labor to answer the phone. They install recordings to mollify people who are on hold for hours. They measure the cost of the call center and put loopholes in the warranty.

When you see customer service as a cost center, all of these steps make sense. Any money spent lowering costs seems to raise profits.

But customer service is actually a profit center, for four reasons:

First, because the customer who calls you or shows up at the adjustments window is fully enrolled. Unlike just about every other moment you’ve had with them, in this moment, they are paying attention, leaning into the situation and on high alert. Everything you do here, unlike just about every other marketing interaction you have, will go on your permanent record.

Second, because your competitors have foolishly decided to treat this interaction as a cost, the chances that you can dramatically overdeliver are pretty good. You can’t make a car that’s ten times better, but you can easily produce customer service for your car customers that’s ten times better than what most manufacturers deliver.

And third, because in our industrialized economy, people love to tell stories about service. And so the word spreads (or doesn’t) based on what you’re about to do.

Finally, it’s been demonstrated again and again that the most valuable customers are the loyal ones. While your promotional team is out there making noise to get you new customers, you’d be much better off turning your existing customers into repeat customers and ambassadors.

And so, the money you spend on customer service isn’t simply free. It actually repays you many times over.

December 2, 2021

Chief Apology Officer

Companies are discovering that hiring people to mollify critics and disappointed customers is cheaper (in the short run) than changing things, learning from the feedback or even wasting the time of people who do the ‘real work.’

The CAO doesn’t participate in tactical or strategic discussions, and probably can’t explain the dynamics that led to a given policy, or why it’s difficult to change. That’s not their job.

Their job is to make the customer or critic feel heard enough that they’ll accept the status quo without further fuss.

This is the tech support person who’s not allowed to acknowledge that the software has a bug, or the gate agent who is unable to report to the home office that the scheduling system is causing real problems for loyal customers.

In addition to eating away at the mollifier’s well-being, the work of the Chief Apology Officer is also ultimately doomed. By insulating the industrial system from the feedback loop that would improve it, these organizations doom themselves to a slow fade.

“Do you have any influence on how the organization is going to respond to this?” is a fair question. And the CAO can only honestly answer, “no.”

It’s a tough gig.

December 1, 2021