Why Americans are Too Short

4 June 2009 at 22:56 2 comments

One of our cultural short-comings regarding customer care is that it is treated as a cost and not a benefit.  (I say cultural because in simpler and smaller markets it’s quite clear to business owners that they need long-term relationships with their customers.)  Short-term gains come from increasing revenues and decreasing costs.  So this approach means that to realize gains, a company should reduce customer care.  And this thinking, while short-sighted, is actually true… to a degree.  At the extreme, one could eliminate all customer care and this would boost profitability.  But unless you sell a perfect product that meets each of your consumers needs perfectly, your gains will be short-lived.  Why?  Because we want customers to remain customers for a long time.

Two Cases

1)  In one case, products are transactional in nature.  (i.e. Customers are likely to buy only one.)

2)  In another case, customers start by buying one product, but then increase their consumption (either of more of the same product or they cross product lines and buy something different).

In both cases, companies must provide service (even if it means a hit on short-term profitability) so that the customer experience is good enough to create the possibility of future sales.  In the first case this comes through word-of-mouth marketing (which incidentally, isn’t free) and in the second case comes through a level of satisfaction or trust in the first product.

The pivot point is that customer service is not optional.  Whether you sell once to many customers, or many times to one customer, service is required.  Companies that invest in service to differentiate themselves and create a strategic advantage reap the rewards long after their short-sighted competitors fade from view.

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Entry filed under: The Right Kind of Customer Service, Why Bother with Customer Service. Tags: , , , .

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