21957 Tue, 07/12/2011 - 2:36pm
American industry has been on a cost-cutting craze over the last couple of years, laying off employees to save money.
Some companies that have trimmed their payrolls were surely loaded with bloat and prime candidates for some strategic chopping. No harm, no foul, as they say.
But with continued hacking, eventually the ax wielder’s going to hit essential muscle and bone. Employees who survive layoffs are often left to do one task too many.
A recent study in Consumer Reports suggests that some downsizing American companies—especially in the retail industry—may have already gone too far. Customer service, the study says, is bad and getting worse. As companies cut payroll, they just may be throwing the baby out with the bath water.
According to the study, American consumers are pretty much fed up with lousy customer service.
More than half of the survey’s respondents (64 percent) said they had walked out of a store in the last 12 months due to poor service. This shouldn’t be surprising, considering the numerous layoffs over the last couple of years.
I wonder how long it will take the angry and frustrated customers to return to the store. Will they ever go back? How much money did the store lose from the missed sale?
Think about the marketing dollars spent to get the customer into the store in the first place. That’s money wasted.
The study suggests that customer service over the telephone is generally poor as well. Sixty seven percent of consumers surveyed said they had hung up on a customer service representative in the last year.
The Better Business Bureau received more than a million complaints against North American businesses in 2010, according to Consumer Reports. That’s up a substantial 10 percent from the previous year. Is the increase due to an overworked, understaffed customer service team?
Seventy one percent of survey respondents said they were “tremendously annoyed” when they were unable to speak with an actual person over the phone.
Consumer Reports quoted retail industry consultant Jack Abelson describing today’s customer service as “abominable.” He directly blames what he sees as an erosion in customer service on cost cutting. “There is an almost complete failure to recognize and appreciate the value people can bring to the equation,” Abelson said.
The Consumer Reports study also cited jammed checkouts and out-of-stocks as major shopping bummers. Twenty-nine percent of shoppers surveyed complained about long lines.
With a few notable exceptions, retail is making a gradual comeback. Shoppers are ever-so-slowly returning to the stores. Retailers need to make sure they have enough employees to do the job or their potential customers won’t come back. Instead, they’ll be busy flailing around with the baby in the bath water.