Firms courting customer dissatisfaction

When Mary Culnan's three-year-old Kenmore washing machine broke in February, it took three appointments before a Sears repairman showed up. Before he even examined the machine, he blamed the problem on Culnan, saying she had not only used the wrong detergent but also the wrong cycle. The permanent press setting, he said, could have burned out the machine's contacts. "I have no idea what that means," said Culnan, a Boston area professor. The repairman finally traced the problem to a defective circuit board, which fixed things -- for a while.

When Scott Rozett bought a family cellphone plan last June, the salesman assured him he could make and receive calls in San Francisco at no extra charge. But in November, one month after the Idaho resident visited the Bay area, he received a $160 bill for roaming charges. When he called AT&T Wireless, a customer service representative told him the company was not responsible for promises made by a salesman.

When an error in Manon Matchett's Sprint PCS bill caused her service to be disconnected in December, she spent three days trying to get it restored. She called at least twice a day, she says, and each time was transferred from one department to another as she tried to get credit for payments that had never been posted to her account. She talked to at least nine people, but "no one could make a definitive decision," said Matchett, an office manager in the District of Columbia. Nor could she reach a manager, even in the middle of the day. "I was told no managers were available. It was pure hell," Matchett said.

As Culnan, Rozett, and Matchett have discovered, customer service has deteriorated into a new kind of purgatory, one in which companies pass the buck, frequently from one corporate division to another. Or customer service representatives blame other companies. Or, worse, they fault their customers.

"Customer service is getting worse; it's not getting better," said John Tschohl, a Minneapolis customer service consultant.

There is no historical measurement to show if and how customer service may have declined over the past few years, but consultants and academics say there is abundant anecdotal evidence.

A current snapshot of consumer satisfaction by the University of Michigan Business School reveals a large group of unhappy campers. In its most recent American Customer Satisfaction Index, the average score for complaint handling is 57 (out of 100) for the 40 industries tracked by the index. "No one does a particularly good job in handling complaints," said David VanAmburg, managing director of the index, which measures consumer satisfaction with goods and services. There is one exception: supermarkets, which had a customer satisfaction score of 76 for how they take care of complaints.

Why has customer service gone downhill?

Claes Fornell, director of the University of Michigan's National Quality Research Center, which computes the customer satisfaction index, blames the "productivity trap." With companies looking to do more with less labor, or lower labor costs, customer service is one area that suffers. Firms trim employees and/or training. Or they hire outside firms, often with foreign call centers, to handle consumer complaints. "It may be cheaper but [it's] not necessarily better," Fornell said.

A now-retired customer service relations manager at a multinational consumer-product company said cost pressures on his operations were constant. "I had to do gymnastics to prove why" customer service was in the company's best interest, said the manager, who did not want to be identified because he didn't want to blemish his former employer. Unlike with other departments, cost savings or projected sales figures for customer service were hard to prove, "so we were constantly being challenged. I had to arm-wrestle with anyone I could to get extra funds."

At some firms, the economy has required sharp cutbacks in all departments. At Levi Strauss & Co., which lost $349 million in 2003, all departments have been asked to trim budgets. For the customer service department, which has had a Colorado telemarketing firm answer its calls the past six years, that has meant cutting in half its call center hours, and answering calls less quickly; instead of seven seconds, it may take 20 seconds before a caller reaches an operator. The company is trying to use the Internet to provide more answers, or offer answers as recorded messages, in hopes of reducing its call volume by 20 percent.

Michael J. Budde, president of Advanced Data-Comm Inc., with six call centers, all in the United States, hears constantly about cost issues from clients, particularly as they consider taking business offshore, where costs can be cut by 20 to 30 percent. To meet the competition, Budde's firm often agrees to try to end a call as quickly as possible. "If the average call is 3 minutes, and you can cut it back to 3 minutes, you can shave 10 cents off the call, which would quickly add up," Budde said.

Ron Zemke, head of Performance Research Associates Inc., a Minneapolis customer service consulting firm, said as customer service operations run on increasingly tight budgets, many agents are told, "Don't buy complaints." Translation: Don't spend money to fix problems.

And increasingly, many systems are making it difficult, if not impossible, for consumers to talk to supervisors -- a step many advocates urge consumers to take.

"Agents are under tremendous pressure not to give you access to the second level," said John Goodman, head of the Arlington, Va., customer satisfaction consulting firm TARP.

Firms might use supervisors only for "people going ballistic, threatening to sue or go to the public service commission. So agents just tell customers there isn't a supervisor; in many cases it's a lie," Goodman said.