1. Draft
The Lack of Customer Service: marketing, operational
problem or human problem?
Author:
Rod Biasca, www.biasca.com. Management consultant, specialist in process
management and organizational effectiveness
When we go inside a company, the first thing we notice in most cases is lack of
customer service... in the bank, in a retailer, in a supermarket.
Actual experience 1
During the last week of the year, Rod asked the Wells Fargo Bank for information
on payroll services. Several days later, a person called saying that she would
send an e­mail with a quote. When Rod asked for alternatives (there are two
basic services) and to waive the install fee (which was offered until 12­30­05), the
answer was a sort of “take it or leave it”. No further calls or proposals by e­mail
were sent to Rod in the first two weeks of January.
The employee is not concentrating on what he/she is doing, he/she is talking to a
peer, he/she looks for excuses to interrupt what is being done...
Actual experience 2
Some weeks ago, Rod renewed his subscription of the Wall Street Journal (a
major newspaper) via Internet. In the last step, press “Subscribe”, the screen
turned white. Consequently, Rod sent e­mail to Customer Service to ask if they
had received the payment. As there was no answer, he sent the e­mail again
(address was correct). No answer.
Actual experience 3
Quest Diagnostics is sending bills to Rod for a lab test they did for him in April
2005. The insurance company says they paid in August, and indicates a date.
Customer Service is unable to solve the problem and cannot tell Rod what to do.
Different employees show they do not care (“Send us a copy of the check”,
“Contact your insurance company”).
Actual experience 4
Dillard’s. Rod asked an employee why they do not answer the customers and
offer suggestions. The sincere answer was: “We do not want to spend time
Draft. Customer Service. Rod Biasca. 1

2. taking with customers, because we can lose a sale to another customer; we are
paid according to our sales not by the help we provide customers. Providing
advice does not always produce sales”.
Is it really true that the “customer is the king”? What is happening to the customer
service employees? Are they well trained? The job is not interesting? The boss is
too demanding? Pay is miserable?
When the employees offer poor quality of service and lack motivation it leads to
customer dissatisfaction and ultimately, loss of business and lowered profit
margins. Some analysts suggest that by businesses implementing self­service
stations, it created non­responsive customer service employees by diminishing
their value, worth, and responsibilities.
According to Jeffrey Gitomer, journalist of the Kansas City Business Journal,
these are ten basic reasons why service is so bad: (2002)
** Company has the wrong mission statement. It is not understood nor relevant to
the customers it serves.
** No written principles for customers are established (just a bunch of rules and
policies).
** Poor examples set by upper management. They are inaccessible to customers
and employees alike.
** Companies allow employees to be rude to customers and tell customers no.
We live in an era of responsibility shirkers and blamers (“It is not my job” is the
credo)
** Companies value customer “satisfaction” rather than “loyalty”. Satisfied
customers will shop anywhere – loyal customers will fight before they switch.
** Low training budget priority
** Concentrate on competitive issues, rather than competitive advantages
** Companies provide company training and policy training, but few offer
personal development training
** Failure to realize who is really in sales and service, ­­ anyone who talks to a
customer.
Although his premise holds validity, systems and processes have been
developed to measure performance levels within a company, and to provide a
collaboration of management and training to oversee and remedy these issues.
All types of models and solutions have been developed to address these issues.
Draft. Customer Service. Rod Biasca. 2

3. One new set of procedures that is gaining popularity in service­oriented
industries is Customer Relationship Management. It is an automated system
that provides a total solution and approach in determining and improving
customer satisfaction and loyalty. The technology targets the best customer
prospects, identifies customer­buying habits, measures employee performance,
and provides performance­training programs, in addition to organizing and
managing the administrative and business operations. “The purpose of
Customer Relationship Management (CRM) is to enable organizations to better
manage their customers through the introduction of reliable systems, processes
and procedures for interacting with those customers.” (Wikipedia, 2006)
Actual Experience 5
UPS left an “Infonotice” in Rod’s door saying that a package has been left in the
office (the administration of the community). The package was not in the office.
Rod sent e­mails and called UPS. They said the information was not enough,
that they needed a tracking number. After imaging possible senders, Rod
contacted some and found the shipper and the tracking number. With that
tracking number he found in the UPS website that somebody whose name
nobody knew has signed a receipt. Calling by phone and by mail, UPS repeated
what was already in the website. After a couple of days a person living in a far
away house that had opened the box, gave Rod the box. The box label was
correct; it was delivered to a wrong address. UPS employees did nothing to solve
the company mistake.
Kaplan & Norton (2004) explain with their Balanced Scoreboard model how
results are obtained in an organization. If sales are poor or complaints are high,
one of the value­creating processes could be not well done. The customer
management processes is one of them. Customer management consists of four
generic processes: select customers, acquire customers, and retain customers
and growth relationship with customers. If results are poor, intangible assets are
not aligned to enterprise strategy: something is wrong with human resources,
information systems or the organization structure. One of the common causes is
lack of skills, poor knowledge and lack of motivation.
Poor customer service and operational problems due to lack of training,
motivation, engineering design problems and lack of maintenance could be costly
for the company.
Actual Experience 6
Rod’s son took his new car to Pep Boys in Denver to change the oil and change
the oil filter. Two days later, the car stopped after leaking oil. An inspection
indicated that the oil filter was not adequately changed and the car has lost all
the oil. The damage was severe and anew engine was needed. Pep Boys or its
insurance has to pay for a new engine (more than $ 5,000) and a three week car
rental.
Draft. Customer Service. Rod Biasca. 3

4. Some of the costs are not easy to track, in this case probably, Pep Boys’
insurance will pay the bill (and this event could increase the insurance cost the
following year).
The Harvard Business Review (2003) made a summary of the motivation subject,
from the classic approach of F.Herzberg to subjects as empowerment,
compensation and supervision. The inadequate use of pay for performance
systems, short run objectives, company culture and supervisors that do not
motivate are some of the common reasons.
Actual Experience 7
Rod is member of a 24 hour Fitness club, inaugurated three years ago. Facilities
are nice. But often there is no soap in the showers. In the last two months and
estrange additional charge has appeared in Rod’s credit card. Although it was
recognized that the charge is wrong, nobody seems to be responsible of fixing it.
Sometimes the best approach may be not the ones recommended by the
marketing experts. For example: Albert Schindler describes “Five Secrets of
Good Customer Service”:
** Build business to customer loyalty
** Provide true customer service
** The customer is always right.
** Be honest with your customers.
** Educate your staff.
Cultural problems are rarely mentioned. Most American managers assume that
what is true for Americans working in the United States is also true for people
from other countries. Sometimes it is not. Cross­cultural management is a new
field relative to the traditional study of management, and there are not too many
examples of failures. Example: some American firms willing to cut costs hire
Hispanic personnel (or contract suppliers with foreign personnel), paying them
lower salaries or making them work in jobs that Americans do not want to take.
But customer related problems are perceived in another way by these
employees, supervision is not easy and conflicts developed. You do not manage
in the same way a Mexican, a person born in Nicaragua or an employee born in
Venezuela.
In a nutshell: this is a real problem that affects companies we know and use;
some of them are major companies. There are different opinions and various
proposals that could be implemented. The author of this article think that Kaplan
& Norton (2004) recommendation of concentrating in some causes is the key to
solve some customer management process problems. In some companies the
orientation is not correct. In a Ritz­Carlton hotel (that is well known for its
customer service awards) the hotel manager tried to solve a customer related
problem with Rod sending him to the room a big basket with fruit and chocolates.
Draft. Customer Service. Rod Biasca. 4

5. Face reality. Customer service problems are the peak of the iceberg. Its
improvement is something more complex than being nice to the customer.
Books, seminars, software have been not enough to solve the situation.
Improving involves process definition, engineering design and maintenance,
employee selection and training, organizational structure definition with clear
responsibilities assigned, supervision, cultural conflict resolution, monetary
incentive design, etc.
In a competitive world if these problems are not solve, the firm will loose sales
and have higher costs.
______________________________________________________
References.
Gitomer, J. (2002) Why is Customer Service So Bad – Good Question Even
Better Answers. Kansas City Business Journal. Retrieved on January 10, 2006
from: http://phoenix.bizjournals.com/kansascity/stories/2002/10/07/smallb3.html)
Wikopedia Encyclopedia (2006) Retrieved on January 10, 2006 from:
http://en.wikipedia.org/wiki/Customer_relationship_management
Kaplan R. – Norton D. Strategy Maps. HBS Press, 2004
Motivating People. Special Issue of Harvard Business Review. January 2003.
Schindler, A. E., 5 Secrets of Good Customer Service. Retrieved on January 10,
2006 from: http://sbinfocanada.about.com/cs/marketing/a/custserviceas.htm)
Draft. Customer Service. Rod Biasca. 5