One Man’s Opinion: The Death Spiral of Customer Service By Bill Crane
I am a good and loyal customer. If I receive a good product or service, at a fair price, from a retailer, vendor, or contractor, I keep coming back for more. It’s called Customer Loyalty, and for enterprises who understand that it’s perhaps the greatest dividend from investments made in solid customer service. My last three cars have each been a Kia Sportage, all three purchased at Bulldog Kia in Athens, from the same salesmen. Until very recently, I was with the same auto insurer for thirty-eight years. In the early 2000s, we found an outstanding cleaning service, United Home Cleaning, and in addition to expanding and using more of their services, we regularly refer them to new customers as well. Yet strangely, I find monthly, if not weekly, that fewer and fewer enterprises, large and small, seem to think that customer service actually matters. As a broke young TV reporter in Macon in 1984, I had overbought myself a new sports car. My monthly car payment and related automotive insurance each combined to cost a week’s pay and half my monthly income. I had to find a more economical solution... and fast. GEICO operated a huge call center in Macon and had just opened its first “customer facing” independent agent office. That agent, Jerry Sorrells, could not have been more customer focused. He wrote me a policy, for nearly half the cost I had been paying, and that began a thirty-eight-year relationship with the insurer. Sorrells is still with GEICO, running his own shop in Cobb County. Yet when my GEICO policy renewal arrived in July of this year, it proposed a premium hike of 150%, while I was simultaneously dropping from three insured vehicles down to two. Thinking there had to be an error, I made several calls to GEICO, spent hours on hold, being
transferred, etc. I explained that I am in my early 60s, not my 20s, that my last claim was in 1991, and that I have had no moving violations of any kind for well over a decade – generally, the type of customers they want. GEICO explained that “underwriting” was driving these premium increases, as well as significant increases in medical claim expenses in the event of a serious accident. I have not been involved in a motor vehicle accident since 1986. But my calls got me nowhere, so in about six hours I contacted three other insurers, got quotes with matching coverage, and moved to the insurer and broker currently handling my homeowner coverage, for a 50% reduction in my insurance premium. I subscribe to a lot of newspapers. The big guys seem to only want new subscribers, not seeming to appreciate longtime readers. The mobile phone, cable, and other media companies are always running great promotions for the NEW customer, but leaving out the loyal customer. IF you have to BUY all your new customers with price cuts and promos, those customers will only be with you until your competitor runs a better promo. It is called churn rate, and it is all about the high costs of customer acquisition. As a small business person myself, I know all too well that the best customers are the customers you ALREADY HAVE. Seek more of their business, do more of what you can do for them, as they already like and employ you. There are still companies that do get this. The list just seems to be getting shorter. Chick Fil-A, which is again ranked as America’s Favorite Restaurant Chain, puts customers only behind the quality of its products. Georgia Power is still known as being customer-focused, despite being a huge monopoly utility, and I will go one step further that several of metro Atlanta’s new municipalities, offering a city-lite model, with high touch and customer service, at least seem to their new residents as if they really do care. And again, most small businesses, who already understand the high costs of customer acquisition and the comparatively low costs of customer retention have understood this model for years. So this effort not only pays off, it makes a huge difference in customer satisfaction, referrals of new customers, and happy customers Continued on page 20
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