Is Customer Service Dying?

"I think it's a natural outcome of cost-cutting and job-cutting that has gone on for the last several years," agrees Kristin Anderson, president of customer service consulting firm Say What? Consulting in Minneapolis and co-author of Customer Relationship Management. "When you have a reduction in force people can continue to perform well only for a limited time."

Other critics blame deregulation in some industries, like the telecommunications and cable loosening enacted by the federal government in 1996. They argue that deregulation has ironically led to less of an emphasis on customer service as companies focus more on their bottom lines than on pleasing the customer.

"Levels of customer service are a very big issue and they're much more of an issue now with the advent of competition in some parts of the industry," says Carl Wood, commissioner of the California Public Utilities Commission. "The marketplace is supposed to correct these problems, and maybe in the long run it does, but in the short run it hasn't been doing a good job of it."

Signs of Improvement

For their part, many companies say they're constantly trying to improve customer service, despite any financial hardships they may face.

A Qwest spokesman, for example, says that company has made many strides to improve its customer service in the past two years. In the first quarter of 2002, almost 99 percent of the company's installation requirements and more than 96 percent of repair commitments were met on time, according to the company's internal measures. The company is also trying to resolve customers' problems in one phone call so they don't have to keep calling back.

AT&T has also started using "natural language" technology in its customer service lines. Callers simply say what their problem is into the phone and a computer will automatically direct them to the information that they need. If the problem is too complex or the system doesn't understand what the caller is saying, a customer service representative will answer the phone.

The company says it has seen an 80 percent decrease in customer complaints and a 30 percent reduction in repeat calls during the first four months of use.

Anderson thinks that perhaps an upswing in better customer service could be under way. "I think we are at the very bottom of that trough, but I won't guarantee that it can't go a little further," she says. "We're going to start to see again a focus on how do we manage customer service and do it in a way that doesn't have to add a lot of additional cost."

Indeed, some companies' ACSI scores have posted dramatic gains. Reliant Energy and Xcel energy were among the companies that have shown improvements.

And a most surprising gainer: The U.S. Postal Service. Perhaps there's hope after all.

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