Seth Godin shares a story about his struggle to resolve a customer service issue over the phone.  The system at the company he was dealing with seemed designed to have him give up and get him off the phone as quickly as possible without actually solving his problem.  He writes, "Most customer service organizations are architected around a simple idea: interacting with customers is expensive, driving costs down is a good thing, thus getting people to go away is beneficial."

Unfortunately, in this case, the end result was Seth feeling like he'd done something wrong, when in fact he had not.

According to Godin, "Do people who go through process and manage to prove that they are not criminals end up doing more business with us as a result of the way we treated them?" If the answer is no, you're probably doing it wrong.

As we noted last week, many businesses are not following this advice because they feel they can get away with delivering poor service.  However, it could only be a matter of time before those negative experiences pile up and force consumers to do business elsewhere.

Clearly, companies must find a balance between minimizing costs/improving efficiency and delivering quality experiences for customers that cross channels to do business. 

Did Cyber Monday become a phenomenon because people naturally flock to their computers the Monday after Thanksgiving, or do people now flock as a result of all the hype?   Regardless of its origins, many retailers are reporting this past Monday to be one for the record books.

Baltimore Sun columnist Jay Hancock writes a provocative piece today on "The high cost of savings" where he states that providing great customer service simply isn't enough of an incentive for consumers to stick with a brand, and that most businesses realize this and choose not to deliver quality service as a result.  He writes, "What shoppers really want is a low price, and they're prepared to put up with huge amounts of grief to get it. In the language of economics, the marginal utility of more, cheap stuff is greater for the average American than gracious service in obtaining it. Yet we reserve the right to whine."

Hancock makes an interesting argument, but there's no shortage of evidence contradicting his main thesis.  Consumers, according to a number of surveys, are in fact concerned about more than just price.  And, customer service goes a long way towards securing the long-term loyalty and value of an individual.

Just yesterday, Nielsen Online released a study that finds convenience trumps price for online holiday shoppers, while a recent Harris Interactive poll found that 80 percent of U.S. adults who have had a negative experience with a company say they will never go back to that company again, up from 68 percent in 2006.

However, as Hancock points out, customer intent and customer action aren't always the same.  According to Hancock, customers often say they'll abandon a brand after a poor service experience, only to be drawn back by low prices or promotions.  Seventy percent of people keep patronizing a brand or store even after they have had a bad experience, says Richard Feinberg, director of Purdue University's Center for Customer-Driven Quality.

Does this mean that companies should forget about even trying to provide good service?  Presumably, only if they're not concerned about the other 30 percent of consumers.

Interestingly enough, while Feinberg mentions consumer apathy as a main contributor to why companies continue to get away with poor service, his own organization cites several sources that find poor service is indeed an influencer in consumers switching their shopping behavior.

Some of the highlights include:

Seventy-two percent of the consumers who switch to a competitor did so because of customer service problems.
A study by The Forum Corporation

Only two percent of unhappy customers complain, while thirty-four percent of all dissatisfied customers penalized the manufacturer by quietly switching brands.
The study by The A.C. Nielsen Company

Sixty-eight percent of customers switch suppliers because of the indifference shown them by customer service personnel.
Tom Peters, U.S. News and World Report

Other industries have also found that there is a tie between profitability and customer satisfaction.

While there are various sides of this argument, the question remains, even if consumers don't initially act on their impulses to abandon a brand after a poor service experience, how long can companies continue to get away with poor service before consumers actually do something about it?

And, if and/or when that happens, which companies will be in the best position to capitalize on that revolt?  Those that have consistently offered quality service, or those that have taken their customers for granted by not offering good service?

The costs of keeping the contact center open, adequately staffed and appropriately equipped to field thousands of calls per day can be tremendous. Further, certain calls can deplete agent productivity, as often times, customers are calling with questions they could easily answer for themselves via the website, such as inquiries about order tracking or shipping status.

However, today’s consumers view customer service as a significant differentiator, and a reason to form loyalty in an overcrowded marketplace where competing offers are just a click away. By offering shoppers customer service options based on context, you can still cut service costs while catering to customers’ unique needs — a significant driver in establishing customer loyalty and generating sales.

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Sometimes customer service can be a great marketing tool. Or, as this Adotas contributor puts it, a new kind of interactive advertising.