Not Worth the Effort

This isn't our usual fare, nor Howard Kurtz's, but Kurtz, a Washington Post regular, is running a column in which he trashes the level of customer support offered by many of the companies we deal with on a daily basis. It can often seem like a small thing, but really it touches our lives on a regular basis and can make for some painful experiences. He makes a strong case, backed up by experiences we have all shared. But while he scores points for well-deserved indignation he misses the deeper analysis. The universal degree to which large companies short-change their customer service represents the voice of the market, and the voice says it is simply not worth the money to provide the support. The profits lost by poor service are obviously not a large a figure as the cost to provide good service. No venting of frustration changes that. Even service-conscious consumers have little option to vote with their pocketbook. What phone company can I choose that provides good customer service? None that I know of. It seems the die has been cast and businesses have responded and little avenue remains for consumer choice. And even if the choices were better, there are few channels for communication of this information by which a consumer can make an informed decision. Certainly self-reporting can't be relied upon, as most of these companies claim to have wonderful customer service. Further, most customers don't have any contact or personal experience with a company's service department until after the company already has their money. Is this poor service an expression of the preferences of consumers? Would we rather save the money? Or is this a market failure where consumers are not armed with the knowledge necessary to make choices in line with their preferences?

I know for my part I would, at least some of the time, be willing to pay more for better service. It would help to know how much it would really change the price, and would be nice to be given the choice. But as in many of these cases I think a trusted third party (be it private or public) would be needed to referee this market.

And, on the other hand, there may be a case to be made that the free market works, and this really is our choice. There recently was an article on Slashdot about companies trying to rein in the costs associated with "abusive" customers (which is sort of an interesting topic in itself). Aside from supplying a lot of fodder to support Kurtz's point, the ensuing discussion contained a number of posts from foreigners who visited the US and were absolutely appalled by the quality of service they found there. Obviously things work differently in other markets. Is this simply a cultural difference? Or have companies in those places simply not maximized efficiency to the point that they eliminated funds for customer service? Or have customers in those markets demanded good support by their purchasing decisions? I have little basis by which to answer these questions.

I suspect that at least in the case of the US market, aggressive cost-cutting during market downturns led companies to slash service expenses. Then when they saw that the world didn't come to an end, and that consumers, despite a lot of whining, mostly took it in stride, they didn't bother to pump the funding back up later, or even proceeded to cut it further.

Perhaps more fodder for our free market discussions...