Seth Godin blog post - Customer service is free

Seth Godin’s recent post Customer service is free is absolutely spot on. Most companies see Customer Services as a cost, something to be managed. They fail to see the marketing opportunity it is. Just think of your own personal experiences with a company, when it went above and beyond. Did you feel the urge to tell others? Did you feel a greater sense of loyalty? If you did, you’re not alone. It’s how most of us feel after a positive experience. No other marketing activity leaves such a lasting impression. There’s a reason why some refer to it as the “moment of truth”.

Marketing depts spend a lot of money to entice us to become a customer, but here’s the thing. It’s a lot cheaper holding onto the customers you’ve got. But how spend more on retention, rather than acquisition?

Not every great customer experience creates advocates, but I guarantee a bad experience is going to get shared with more people. When the detractor shares a crap experience with family and friends, they make it harder to win new customers from that group. In our hyper connected world, news travels far and wide, fast. If, and when, there’s an opportunity to become a customer, they’ll remember the detractor’s story. Our brains are wired to hear, and remember, negative experiences more than positive ones.

Most companies know this, but time and time again, their actions say otherwise. One bad interaction can destroy years of loyalty, in a heartbeat. I was a First Direct customer for 25 years. I knew they weren’t the cheapest. But over the years, I never failed to be impressed by the outstanding service. In an era of poor call centres, First Direct stood out. But one day, they forgot who’s money they were looking after. I wanted to withdraw a large amount of cash. I know UK regulation restricts the amount of cash you can draw in one go, but I got a flat “no”.

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BANK: Why do you want the cash?

ME: I need to pay various people.

BANK: Tell the people you need to pay to provide bank details for a bank transfer.

ME: Sorry? Are you saying no?

BANK: *pause* Yes

ME: Why can’t I draw the cash? Is this your banks policy or UK regulation?

BANK: I am afraid you can’t have the money?

ME: I can’t have my money?

BANK: I am afraid not.

ME: I am going to ask one last time, then you’re going to lose my custom. Can I please withdraw the cash?

BANK: Sorry, no.

ME: Thanks, goodbye.

After this exchange, I popped into my local Barclays and got my money. They also asked me why I needed the money. They said no to the original amount I asked for, but most importantly, they gave me alternatives to withdraw a lower amount. Barclay’s managed the conversation, and kept me happy. First Direct wasn’t going to tell me whether I could or couldn’t withdraw cash….my cash. It took First Direct 30 seconds to end a 25 year relationship. I filed a complaint. The response was clearly a cut and paste answer and an inaccurate one at that. It still didn’t tell me why they said no. I won’t bank with First Direct, again, ever.

The true cost of customer service isn’t hiring people, running call centres, or buying equipment. It runs much, much deeper, but the problem is, it’s not a line item in the budget screaming cost! It’s a hidden cost of bad customer service. It is a revenue stream, when it’s good customer service.