The Price of Customer Service

Posted · Add Comment

Giving Customers The Boot

Good customer service is a premium for many companies these days.  It costs money to provide it, and therefore service is often one of the first places management looks for savings when cutting costs.  Turns out, there’s another way to provide customer service:  create a revenue center!

I called a hosting company because a business email account stopped working.  A very polite man answered my call, after the “press one for….” process and a 15-minute wait.  He said he could send me an email with information about how to set up my email OR I could purchase the premium customer service package for over $50.  With the premium customer service package, he could forward my call to the guys who actually solve email problems.

I explained that:

1.  My email didn’t work, so how could I receive his email with instructions?

2.  I set it up right because it worked before and just stopped, so ‘how to set up my email’ wasn’t going to help.

3.  I purchased this email service (it is not a free service), so why would I spend more to make the service actually work?

4.  Who buys a service that doesn’t work?  And, who buys premium customer service for multiples of the original service costs?

5.  Are they trying to give their customers the boot?

After some confused attempts on his part to sell me the upgraded customer service, he finally said he would try resetting my email on their end.  He did it within one minute and the email account worked.  His up-sell was priced just over $50.  With the “premium customer service” offer, service goes from high cost to high profit margin.

Before 24 hours, I received a short survey from that hosting company, asking about my customer service experience. The questions were “was the service person polite?” and “did you get your problem resolved.”  Nowhere did they ask about my response to their “premium customer service” offer.  They didn’t want to know.

I’ll cancel my account and move my email service elsewhere.  I’m just one customer.  The question is this.  If you calculate all of the profit they make on those desperate customers who choose to buy the premium customer service, will it make up for the lost profit when angry customers go elsewhere?   Will they win or loose?

To all those entrepreneurs defining customer service for your businesses, remember this.  Referred customers are happier customers and stay longer.  Referred customers don’t require as much marketing expense. Among the more than 100 entrepreneurs my company has interviewed, with 1 to 1000’s of employees, in over 80 industries, referrals were a primary source of new sales.  Referrals are a direct result of great customer service.  It can pay for itself over and over again.

All the best!



Leave a Reply