United Airlines learnt their lesson when a disgruntled customer took to YouTube to complain – and got 14 million views. Photo: Rob HomerUnited Airlines clearly didn’t set out to break guitars. But the airline quickly earned that reputation in 2009 when a disgruntled customer Dave Caroll broadcast on YouTube a song about his failed bid for compensation from the airline, after it broke his $US3500 guitar.
The airline’s “indifference” to the musician’s predicament, and a fruitless eight-month-long negotiations became known to more than half a million people within a week of the song’s release.
The clip United Breaks Guitars has 14 million views to date, and is used as a staff educational tool by the airline.
The case was a reminder to companies the world over of the unmistakable shift under way – the rise of the customer, who is now armed with the new weapon of social media – to hold companies accountable for bad service.
The landscape is well known: customer price comparisons and reviews form interminable threads on online forums, which can have adirect impact ona company’s bottom line.
Customers want influence over the contents of what they’re buying; they customise the muesli they order online; stream entertainment that is tailored to their interests, and pitch ideas to software companies as they develop new products.
Customers want to choose between the style of service they receive. Companies are expected to offer human to human interaction, self service and instant messaging.
In findings that still resonate, a seminal study in 2006 by professor of marketing at Melbourne Business School, Mark Ritson, demonstrated most Australian companies were not performing well on an international measure of customer satisfaction called the “net promoter score”.
Similarly, a 2013 report by management consultant Bain & Company showed the average Australian net promoter score was negative.
Before the unleashing of globalisation via the internet, Australia was “one of the biggest and most oligopolistic markets in history” Professor Ritson said. A “distinct lack of consumer focus” meant Australian customers were often stuck with expensive and poor quality products.
“Australian brands now know what they have to do in terms of customer orientation and service improvements. We’ve been poor in the past because, frankly, we could get away with it.”
It was only with the advent of the internet and social media, and the arrival of major international players across key industries, that a procession of chief executives began to pepper their rhetoric with customer-oriented buzzwords, he said.
In February, the newly installed Westpac chief executive Brian Hartzer declared a “clear customer-centric strategy” was his top priority.
In taking the helm at Myer, Richard Umbers put customers “right at the centre of our decision-making process”.
Similarly, the new boss at Telstra Andrew Penn has pledged to continue the commitment to “customer advocacy”.
At the same time, new jobs such as “chief customer officer” have entered the ranks of the senior executives.
The jargon begs the question: what does good, customer-oriented service, actually look like?
“There has been a lot written in the past 20 years about the need to ‘Wow’ and delight the customer, but that has been overdone,” said customer experience strategist and co-author of new book Your Customer Rules! David Jaffe. “Companies are going back to the basics. Customers are happy if a product or service works well. They don’t expect to be ‘wowed’ when they’re paying their bills.”
Quality service is delivered in real-time, via a channel of the customer’s choosing (services on wearables is in the offing) and at a time the customer prefers. Customers want increased access to a company’s senior executives, and do their banking while on an international flight.
Customer service teams at IT, computing and telco companies are liaising closely with engineers, strategists and marketers, and giving managers direct customer feedback.
Marketing strategists campaign for the value of social media in the future of customer-oriented service, and are winning. IBISWorld figures, for example, show 40 per cent of Australian businesses now have a social media presence.
But Professor Ritson warned companies relying just on Twitter and Facebook to innovate their service risk wasting time and money.
Research showed Australia’s top 10 brands including ANZ, Westpac, Coles and Woolworths, reached less than 1 per cent of their customers on Facebook, Twitter and Instagram, he said.
“Social media is giant pile of bulls—. It’s oversold, over-exaggerated by a trendy group of young marketing agents in love with social media but who don’t look at the metrics behind these models,” Professor Ritson said.
Rather than invest too heavily in social media, an all-of-organisation restructure putting customer needs at the core of a business enabled companies to improve customer loyalty, said lecturer in marketing at the University of Technology’s Business School, Dr Eugene Chan.
“It’s not just the people who see or meet customers, not just the tellers or cashiers who are responsible for the customers, but every aspect of the company – human resources, the IT department, managers and marketers – need to come together to respond to customer concerns with a more efficient service.”
This vision was best achieved at Amazon in the late 1990s under its former vice-president of customer service, Bill Price, who pioneered “Skyline”, which categorised customer feedback into 30 codes, with each code assigned an “owner” – an Amazon senior executive – who reported directly to the chief executive.
The feedback would be relayed to product developers and web developers, and influence the strategy of the company. Under the model, the “Contact Per Order” measure (a figure showing whether a customer had trouble with the service) dropped 30 per cent every year for over five years, said Mr Price, who is also co-author of Your Customer Rules!
“Customer service can quantify the feedback, and provide the customer’s language verbatim in talking about trends, and then those marketing the product and developing it get a whole new way of understanding customer demand,” Mr Price said.
But radical restructures were expensive, and a company’s so-called commitment to customers was often “skin-deep”, glibly adopted in a bid to sound relevant, said senior lecturer of organisation studies at Melbourne University’s Department of Management and Marketing, Dr Joeri Mol.
As a result, customers were stuck filling out long surveys, while calls to customer service hotlines did little to serve their needs.
“The reason [for poor customer service] is clear,” said Dr Mol. “Putting the customer first requires substantial investments which these companies are not always prepared to make as they are very costly.”
Dr Mol said a customer-led economy did not always lead to higher quality services. For instance, the infiltration of review forums has drowned out expert opinion, as internet trolls, bots or employees of the company being reviewed contaminate online discussion, he said.
There have been reports of hotels trying to charge clients more for their rooms when they wrote a bad review, and also of people blackmailing companies and threatening a bad review.
“Whilst there is currently a mushrooming of blogs and apps that aid customers in their choice for competing products or services, the question remains whether we are any better off than before.”
This story Administrator ready to work first appeared on Nanjing Night Net.