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How much does it cost to be rude?

June 9, 2011 by Mike Wittenstein — Customer Experience and Service Designer, Storyminers

Consumer Reports July 2011 edition tells us that "Sixty-four percent of respondents said that during the previous 12 months they had left a store because service was poor, and 67 percent had hung up on customer service without having had their problem addressed." They also report that "65 percent felt 'tremendously annoyed' about rude salespeople. And 56 percent felt that way about having to take multiple phone steps to reach the right place."

What's happening is that in an effort to produce ever greater returns for shareholders, companies have shifted too much of the service burden to their customers without regard for how much it costs them. That cost consists of time, money, and emotional energy. Customers (that's you and me) aren't standing for it any longer. They're vocalizing their discontent using social media, telling negative stories to their friends, and voting with their feet-deciding not to repatriate businesses that they feel aren't treating them right.

That's costing businesses billions. But they can't measure it because they don't pay attention to customer cost and effort. If these measures were part of the design and decisioning processes, it would be simple to calculate a practical balance between company expense and customer cost. When customers walk out on the companies that serve them, those brands lose more than immediate sales, they lose referrals and follow-on sales (a.k.a. lifetime value of a customer). When customers walk, it also costs companies additional service dollars: additional advertising to replace lost customers, online reputation monitoring software to spot bad incidents before they go viral, and additional customer service expenses to deal with those customer who stay and fight for what they want.

Companies should do three things to stop the vicious cycle of cost-cutting to keep profits up:

1. Start measuring customer cost (in dollars, time, and emotional energy) and use that information in service design
2. Make service design a real position with proper support instead of an ad-hoc committee undertaking
3. Focus on the interface between the customer and employee experiences to create processes that are easy for everyone

In my opinion, the best service designs are the ones that give everyone more of what they want. Great services (and processes) are introduced on purpose and by design to be easy to use, low-cost, low-effort, and effective not just for the business but for the customer at the same time.

The source of this thinking stream is an article published in the Harvard Business Review entitled "Stop Trying to Delight Your Customers" and the corresponding consulting methodology published by the Corporate Executive Board. You can read the details here.

About Mike Wittenstein

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