A Case Study in Bad Customer Service

In my opinion, the quality of a company's customer service is BY FAR the most important ingredient of the numerous factors that go into a company brand reputation. Unfortunately, there are too many companies--even of the large, successful variety--that just don't get it.


I wrote previously about "The End of Customer Service" back in May, 2008. With people pinching pennies due to the great recession, it doesn't appear that things have gotten any better.

The impetus to write further on this topic came from a recent, painful personal experience. The source of my pain was DIRECTV.

Troubling developments for a long-time customer

I have been a DirecTV customer for roughly 13 years. This is a long time for a relationship with any consumer products or services company. I initially fell in love with the programming offered by the company, especially they wide variety of sports. I still find their programming compelling. Initially, I also found the customer service and support to be first rate in the beginning. Unfortunately, over time the level of service has declined from first rate to astonishingly bad.

The level of customer service began slowly deteriorated about five years ago. I suspect that it did because the company was struggling to show a profit. It appears somewhere in that timeframe management of the company transitioned from a customer-orientation to focusing strictly on short-term profitability. This led to some short-sighted policies, which I believe could eventually lead to the death of this company.

A long series of customer service and equipment incidents over the last several years left me so frustrated that I decided I could no longer remain a customer, and became resigned to finding another TV service provider.

The final straw

My last customer service experience was what put me over the edge. I had payed $400 for an NFL programming package, only to find 2 games into the season that one of my two receivers was no longer capable of receiving this premium programming. It wasn't really a technical issue, but a decision by DirecTV to no longer support this specific programming on that type of receiver. The receiver worked fine otherwise, and in fact had some key features not available on the more contemporary DirecTV models of comparable capability. I had paid good money for the receiver and had given the company a large premium programming fee for the NFL package that year (and many previous years), and I had not been told prior to renewing football subscription that year that the receiver would no longer receive this programming.

A few years back DirecTV had come under the control of Rupert Murdoch, which led to an equipment partnership with one of Murdoch's affiliated companies. I have one of these as my primary receiver, and it contains some of the worst software I've ever seen in a consumer electronics device. Because of this, I would have preferred to continue to use my old receiver, which works great. But I wanted to be able to access my expensive NFL package on my second receiver, and I felt that I was at least entitled to one that could do this without losing other features important in my current receiver--at not cost, given the circumstances.

What ensued was a Keystone-Cop like series of customer service episodes punctuated by poorly trained service reps, extremely long phone-support hold times and multiple equipment shipments back and forth. I won't bore you with every detail, but it started with an initial call which required 15-20 re-dials just to get through to the "hold" point, followed by a 1½ hours wait time. I'd like to say that was the worst part of the experience, but things actually went downhill from there.

At the end of this saga, I knew more about the internal customer service processes and procedures at DirecTV than most of the representatives I spoke with. It wasn't hard; most of them seemed to be clueless. Some of them were good people trying hard to help me--others just didn't caret. But many were inexperienced or poorly-trained, and nearly all of them were overwhelmed by the sheer complexity required to accomplish even the simplest task. Long story short, my simple request for a replacement receiver that would leave me happy paying DirecTV in excess of $100 every month was never fulfilled.

Even the CEO couldn't make it right

It was at this point I'd had enough, and was resigned to the fact that I needed to change TV service providers. It wasn't what I wanted--I felt I'd been pushed into a corner by the company's arrogance and incompetence. But first I needed to blow off some steam, and so I wrote an email to the DirecTV CEO, detailing my painful experience. To his credit, he immediately and personally responded, apologizing and agreeing that what happened to me should not have happened. He asked if he could still make the situation right, and promised to have his personal representatives contact me to fix the situation. I was pleased by his reaction.

I was quickly contacted by a member of the DIRECTV Customer Advocate Team, a small top-secret group that you wouldn't be aware of if you hadn't interacted with the highest levels of company management. She was very nice and understanding, and told me that she was empowered to do just about anything that was required to make me a happy customer once again.

Apparently she was empowered to do anything except fill my very simple request.

She offered me a lot of things, many which were desirable. But I was a bit stuck on principle at this point; I wanted to be able to watch my expensive NFL package on a second receiver with comparable features, with no additional money out of my pocket.

She told me she could take care of this, but with one big condition: I'd be locked in to 24 additional months with DirecTV. Apparently, any new equipment sent to a customer automatically triggered this additional 24 month commitment, which no one had the power to override--no exceptions.

Complete idiocy--and very bad business

Here there is a customer who has stayed with a company for 13 years and loves their programming, but has been treated badly by customer service, and feels wronged. Making him happy is going to cost you probably $25 extra to send him a premium receiver instead of a basic one. He'd like to find an excuse to stay, but ready to leave due to frustration. The response is to try to lock him in for 24 months against his will?

I was wondering: are there any managers trained in Marketing at DirecTV? Is there anyone in upper management that has actually ever dealt with a customer? Or are they all accountants?

So for all the software developers and manufacturers out there, what are the takeaways from this customer service tale of the absurd?

Takeaway Lessons

Your product/service isn't everything - I still love the DirecTV programming, but will be leaving because everything else surrounding it has turned bad.

Train your people - There is often a lot of turnover in the customer service department, and it's easy to skimp on training for people that might not be there too long. If you don't want to ruin your brand, Train & Retain! These folks ARE the company to the customers calling for help.

The customer is king - regardless of how desirable your offering is, the customer has alternatives. Treat him badly, and he will vote with his feet--its human nature.

Lock customers in with value, not contracts - that's where you'll find loyalty and long-term profitability. 24 month contracts will only create animosity with your customers--and represent a big opportunity for an upstart, more customer-focused competitor.

Don't be arrogant - Regardless of your market position, if a customer truly has been treated shabbily, swallow hard and do whatever it takes to make it right. Install a customer service culture of taking care of the customer, almost regardless of direct costs. The hidden costs of angry customers are very high from word of mouth and other bad publicity--especially in the Internet Age.

Don't let your accountants set Marketing and Customer Service Policy - As described above, the easily traceable short-term costs savings which are the focus of the financial guys, will be overwhelmed by less obvious negative effects on future revenue, due to damage to your brand.

So that's my sad story, and hopefully some valuable lessons for all of us as we formulate marketing and customer service policies. Do you have a customer service story of your own, negative or positive? Have a different view on the state of customer service today? Share with us in the comment section below.

Follow Phil Morettini and Morettini on Management via Twitter, Facebook, RSS, or the PJM Consulting Quarterly Newsletter. Contact Phil directly at info@pjmconsult.com

Trade Shows for Software & Technology Firms - Do They Still Make Sense?

Let's talk about what, for some people, is a marketing method from a bygone era: Trade shows, or Trade Fairs, as they're referred to in most places outside of the US.

At one point in time, Trade Shows were a staple in most every tech company's marketing budget--shows like Comdex, PC Expo, Network World and a host of others were annual rites of passage. But in this Internet age, they have been greatly reduced in the marketing mix, if not taken completely out of the picture.

There are many reasons for this. First and foremost, the ROI of tradeshows was always very questionable for most exhibitors. In marketing departments everywhere there were sharp discussions during budget time, on whether to continue the expense of the major shows. They always seemed important to be at, but usually it was pretty difficult to make a direct correlation to enough actual revenue, to justify the large expense. As the Internet became more prominent, this ROI looked even worse in comparison--as it did for many other "offline" marketing methods, such as traditional direct mail and print advertising.

So are tradeshows now obsolete? Probably not, but many marketing folks might say that they are on the endangered species list. So when, if at all, do traditional trade shows still make sense today? And what should your goals be, if you do decide to invest in a show or two? Let's take a quick look at 4 points relevant to each of these two questions.

4 REASONS IT MAKE SENSE TO GO TO A TRADE SHOW

A CONTRARIAN APPROACH
One of the major enduring tactics of marketing is to "zig when your competitors zag". If you are in a market where a show is still well attended, but vendors are starting to stay home rather than pay for booths, you may have an opportunity. If your competitors aren't there, you have a larger, captive audience of prospects to strut your stuff to. One of the basic tenets of a good marketing program is to find a "communications channel" which isn't too crowded. With trade shows falling out of favor in marketing budgets, there is potential to benefit from a contrarian approach in some markets.

INTRODUCTION INTO A NEW MARKET
This is always one of the strongest reasons to attend a few shows. If you have a brand new company, or your company is entering a market space it hasn't previously participated in, a couple of well-selected shows can be a very good investment. Remember, you only get one chance to make a first impression.

INTRODUCTION OF A NEW PRODUCT
Much like a company entering a new market, a new product introduction is a very traditional reason to exhibit at a trade show. In my opinion, introducing new products at shows has historically been over-estimated as a marketing tactic. Sure, the press is there covering the show, but if 50 other vendors are also announcing new products, your new product might get lost, or at least get less press coverage then if you announced two weeks before or after the show. Remember the comment above about over-crowded communications channel?. In some cases, announcing at a show fits this description. This can still be a very sound marketing tactic--just do careful research and planning to ensure it is a net positive.

IMPORTANCE OF HIGH TOUCH
If you have a product that absolutely requires some hands-on or personal selling before prospects buy, trade shows can be an excellent investment. For example, if the product is quite expensive, or an expert demo sells far more than prospect downloads from your site. I have a software company client at PJM Consulting who is in a market where expert demos are essential; they have grown the company, to a great extent with trade shows, and almost always can demonstrate a profit on their show budgets.

4 GOALS TO ENSURE A HIGH RETURN FROM A TRADE SHOW

PRESS COVERAGE
This is always one of the most important reasons to go to many shows. If it is an important show, the press will be there in full force. You really need to plan PR tactics ahead of time, however, as all of the other exhibitors have the same goal of getting press appointments and coverage. It is CRITICAL to plan far ahead in securing appointments with target editors, and have a "tease" of substantial news to obtain the appointment. Editor's schedules fill up far in advance. Properly planned, the show can pay for itself here by eliminating the need for a dedicated press tour. But if not well planned, you will end up "wasting" your product introduction or other news, resulting in little or no press coverage.

EFFICIENCY OF INDUSTRY NETWORKING
Networking with the other exhibitors is often overlooked by many vendors. The focus is generally solely on customers, and maybe distribution channels. Often many companies with complementary offerings are attending exhibiting, along with a few competitors. This can be a great arena to begin or continue discussions with potential strategic partners. At a minimum, makes sure to set aside some time to walk the show floor, and see who might have synergy with your company. Even if you're pressed for time, shake a few hands and gather some business cards--it can be an excellent setup for future discussions.

LOCAL CUSTOMER VISITS
This is also an area that holds potential to lift your show budget's ROI, which is often overlooked by many exhibitors. You are flying staff to a faraway city--why not go in a couple of days early, and call on a few potential major customers? At a minimum, make sure you get those free show tickets that often go to waste out to local prospects in your database, so they can come to the show for a meeting or demo at your booth.

LOCAL CHANNEL VISITS
In the same vein as visits to customers, it makes a lot of sense to call on current or potential channel partners, once you decide you'll be spending money going to a show in a certain region. Add a couple of days to your trip and visit a few key partners and prospective partners in the area. And make sure to invite them to the show well in advance and supply those free tickets, so you can see many more later at your booth.


SUMMARY
If you just fly to a city, set up your booth, and wait for new customers to flock by to see you--you are likely to be very disappointed in your return on investment. But if you use a tradeshow as a hub for a variety of related activity, adding a couple of key shows into your marketing mix can still bring a very nice ROI. The key is preparation and planning, to make sure your results are optimized. I've outlined a few reasons why it may make sense to exhibit at tradeshows/trade fairs even today, along with some ways to maximize your return. What's your reason for attending tradeshows in the Internet Age? And what concrete results do you hope to achieve? Post a comment to continue this discussion.


Phil Morettini
PJM Consulting
www.pjmconsult.com

The End of Customer Service

No one answers the telephone anymore.

At least, technology companies in the US surely don't. With big companies, you are either presented with an endless phone tree--"press 1 for a company directory"--or the newest innovation in communications technology: the cheerful "automated voice attendant". In many cases these attendants, and several other "innovative" service options, can lead to a great deal of frustration for customers and prospects.

As a consumer and business buyer I've found this frustrating, not to mention an incredible productivity sink. As a High Tech industry executive and consultant with a strong marketing background, I find this practice curious at best--and insane at worst!

Think about it--how many BILLIONS of dollars companies spend trying to get the attention of potential new customers--most of who are going to need to contact the company at some point. Yet it seems that once we've got their interest, or God forbid, they've signed up as an actual customer--we are doing everything possible to keep them away. Doesn't anyone remember the old marketing adage about current customers being your best source of additional business? Management guru Peter Drucker once said "The purpose of business is not to make a sale, but to make and keep a customer." Apparently not many people agree with this, or have forgotten it, because "modern" customer service practices are doing there best to drive these folks away. Let's examine some of the new customer service approaches:

OUTSOURCED CALL CENTERS IN OTHER COUNTRIES

This may be everyone consumer's favorite new "pet peeve"--calling an American company based in Chicago, or Iowa or San Jose--only to be connected to some call center somewhere in India. Often this leads to a very, very frustrating experience. Companies are going this route for support as an expense driven decision--to obtain cheaper labor. But the reps on the end of the line are often poorly trained, probably aren't employees of the company that you are calling, and often don't speak English with an accent that is easy to understand for most Americans. Are there good reps who give great service available in these call centers? Certainly, I have spoken to more than a few. But compared to the "good old days" of local support, the average caller experience has degraded significantly. Add this to the initial frustration that the caller who is dialing has because of a problem with his or her new $1200 PC--and you don't get a prescription for a happy customer.

PHONE TREES

This one has been around a while, but the increasing complexity of the tree, and well as the difficulty of exiting it to get to a live person, has continually made the situation worse. You can literally spend 5-10 minutes just navigating the phone tree these days. Oftentimes, callers just give up--which appears to be what companies want. I'll discuss below why companies shouldn't.

AUTOMATED ATTENDANTS

As I discussed above, this is one of the more recent scourges of the besieged customer with a problem. Ironically, Automated Voice Attendants have been made possible by a really nice leap forward in voice recognition technology. And there is no doubt that these products have come a very long way from the days in which they were first implemented. But talking to a machine is at this point still inherently inferior to speaking with a real human. I endorse the use of these Automated Attendants, but they should be used judiciously. I would still utilize them only at the very beginning of calls, and not require them to take a customer too far down the line of getting their problem addressed. Also, please make it easy to get away from them to a live human. With the high market share of some of the Automated Attendant companies, I am having far too many conversations with the same perky, Stepford Wife-ish-sounding artificial female voice. It's getting a bit creepy. While we're at it, let's talk about my biggest customer support pet peeve. With all of the sophisticated software available today, why is it that I have to give my account number and god knows what else to this robot lady, and then repeat all of the same information to the first live person that I speak with, as well as everyone that they transfer my call to? I understand security concerns, but geez! Hasn't anyone heard of data sharing and company firewalls?

"INTERNET COMPANIES"

The advent of the Internet has allowed for the creation of the ultimate small company: one man or woman, behind an Internet site. These companies invariably list no contact phone number or physical address. You can only email them for support, or if you're really lucky, IM them. Unfortunately, potential customers figured out that this is likely a one man operation long ago. They will be reluctant to buy your product as a result, because they don't believe you are "for real", or at least they won't be able to get good support. If you have the capability of offering real support, I urge you not to present your company in the image of one of these "Internet companies". If you do, it will cost you business.

FEE-ONLY TECH SUPPPORT

I won't deny that is some cases tech support fees are justifiable, and necessary. Even for consumer tech products. But in most cases tech support, and least at some level and for some period of time, really needs to be bundled into the base product offering. This trend came about with the intention of making tech support a "profit center". While I believe that tech support can drive profits, in many cases it shouldn't be done by attempting to extract additional money from customers (especially upfront or on the initial call) for the right to call in to get product issues fixed. There is a standard of care that most customers believe is fair: Help them get the product installed, up and running. Take care of any bugs or product defects. If you don't meet this standard, you will likely pay for it yourself--in reduced customer satisfaction and loyalty.

I want to emphasize that I am not a racist, market protectionist, political isolationist or technophobe. I have nothing against a man or woman working in a call center India, doing their best to do their job. I'm also a tech guy, and certainly love the idea of using technology to increase labor force productivity. But as a marketer, above all else, I believe in the old axiom: THE CUSTOMER IS ALWAYS KING. Customer service today is not treating the customer as King, but like the lowest creature on the food chain. It's possible that we are just undergoing a period of "growing pains", implementation issues, and the new customer service methods discussed here will be the way to go in the long run. Maybe technology maturity and some additional training for the folks in those faraway call centers will correct the current painful situation.

BIG OPPORTUNITY TO GAIN AN ADVANTAGE

But my guess is that those corrective measures are a long way off. In the meantime, there is a big opportunity for savvy software and tech companies to use this "gap" that has occurred in most company's customer service, to gain a strategic advantage in their market segment.

Unfortunately, in my Software and High Tech Practice at PJM Consulting, I find that customer service operations are usually an afterthought to senior management--especially in early stage companies. It's understandable, since it doesn't appear to be part of the strategic core that will mean the difference between success and failure for a young company. But in today's world, used properly, customer and tech support can indeed be a strategic weapon.

Not only can good support cement the relationship with the customer and build long term loyalty, but don't forget that you've got a customer on the line! Remember the old adage I mentioned above about your current customers being the best place for incremental business? Once you've satisfied the caller's concerns, you have an opportunity to educate them about new offerings, present them with a special offer, etc. The possibilities are nearly endless to profit from this customer interaction. This interaction by the way REQUIRED NO INCREMENTAL MARKETING EXPENSES TO INITIATE. Companies don't realize the opportunity that they are leaving on the table, both to increase customer loyalty, and sell incremental offers to existing customers.

DIFFERENTIATION FROM COMMODITIES

Let's talk about a specific example: HP & Dell in the PC business. I'm an old HP alumnus, and until recently, a long time Dell customer. Over a long period of time, customer support, specifically technical support-- has gone from a major strength, to a nightmare for customers of both companies. At various stages of the customer ownership lifecycle, both of these companies throw every obstacle I've discussed in this article at you--Endless phone trees, automated voice attendants, email-only or IM-only tech support, and clueless representatives in foriegn call centers. PCs are as close to a commodity as anything in the High Tech business these days. These two market leaders, along with their competitors, are pretty much slugging it out on price (and brand, which means less and less in a standards-driven market like PCs). This is certainly not the way to achieve high gross margins, let alone customer loyalty.

Personally, I'd pay 10-15% more to buy a computer from a company who guaranteed good, local tech support. I run my business on my PC; when a problem occurs that I can't fix on my own, it is often excruciatingly painful. I'm sure that these companies don't believe that I, or many others, would pay more. But if a PC company put forth a well-developed marketing message touting their emphasis on technical support and customer service--and stuck with it--they would obtain a customer for life. Now, I may not have been willing to pay such a premium 10-15 years ago, before real customer service "ended". I may have gone for the lowest price. But with personal service and support nearly gone the way of the Dodo bird (become extinct), things are different. Since good, personalized tech support has become a scarce commodity--it is therefore an opportunity that some smart company can exploit.

SUMMARY

There's a big opportunity out there for smart technology companies to go against the current trends in customer service and tech support. Make it easy for people to reach you, using whatever method they prefer. I'm suggesting short phone trees, live operators, and an adequate number of representatives to eliminate long waits. Focusing completely on expense control or technology solutions, not personal service, is a mistake for tech companies. Savvy, "forward-thinking" software and tech companies can increase market share and customer loyalty with an "old school" approach--personalized customer service and support.

That's what I have to say about the state of customer and tech support today--what's your opinion? Post a comment if you'd like to discuss this further.

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/