The List of Losers and Why They Still Win

Well, it just came out—MSN Money’s “Customer Service Hall of Shame”. Check it out; you may be surprised—not by the “winners” (losers) that made the top 10 list, but by the fact that these companies are still in business. Most are even profiting. That made me think—what makes customers come back to poor service? Is it a psychological problem? Are they suffering from battered customer syndrome? Are they so used to the mistreatment that it becomes their new normal?

I don’t think so. I think there are other factors involved—factors like convenience, prioritizing price over service, the availability of suitable alternatives, and/or level of personal interaction. Here’s what I mean. Comcast is on the list (yet again), but they still have hundreds of thousands of customers. Not everyone has a choice when it comes to cable service provision; it is often dictated by where you live. If Comcast is the only game, you are more likely to sign up. Then there is Sprint Nextel (also on the list). Why do they have so many customers when there are so many other cell carriers from which to choose? In this case I think it comes down to prioritizing price over service. Sprint Nextel may have the phone with the features you need at a deeply discounted price. And, in this economy, that is starting to sway a few folks. Finally, let’s look at level of personal interaction. I’ll use myself in this example because I’m a Bank of America (on the list) customer. You might be thinking, “Why would the guy obsessed with service deal with a bank that has been recognized for providing poor customer service?” The answer is simple: I have a limited amount of personal interaction with the bank. The pluses outweigh the minuses in my case—their ATMs are plentiful, their online banking site is great, and the two or so times a year I need to speak with a customer service representative are, yes, annoying and unsatisfactory, but also limited in quantity.

My theory is that in any industry where there is a lot of interpersonal interaction or where there is a plethora of competing services, the customer service has to be top-notch in order for the organization to be competitive (think restaurants, hotels, retail stores, airlines). And until consumers demand (through their spending trends) that service is their most important purchasing consideration, we are doomed for repeat offenders— the losers that win despite their poor service delivery.

I want to hear from you! Respond to one, all or none of the questions below. I just want to hear your thoughts! And, if you post a response, be sure to check back for a reply!

  • Do you agree with me? Do you think that companies that provide poor service will continue to prosper until their revenues are impacted?
  • Do you disagree? What factors do you think contribute to the battered customer syndrome?
  • What baffles me is the continuing customer loyalty to retailers (like Abercrombie & Fitch—yes, on the list) that require a high level of interaction and are expensive. What benefits are the A&F consumers receiving?