Monday, June 16, 2008

Service Slashing

Even longer lines
Originally uploaded by minertribe

Customers are a selfish lot. They desire, demand, and even believe they deserve the best treatment. A belief that isn't unreasonable since they are being asked to spend their money on a product or service they may not even need.

My wife and I recently did some grocery shopping and chose the nearby Wal-Mart to spend our money. Once inside, I realized we were going to be in for a long wait on our way out. The lines were the worst I had ever seen. 32 registers in the store and I counted 10 open on a Saturday night around 7:30 PM. I hoped that they would fix the problem before we checked out (we had a long list of groceries), but we would not be so fortunate. When we were ready to leave, the lines were worse, and they still had 10 registers open. Nothing had changed. The long lines were part of the job, not a problem that required a solution.

Many companies start out with grand intentions and even follow through with great service for their customers for a while. Wal-Mart is an example of this. Sam Walton preached the value of customer service so often, in many ways Wal-Mart couldn't help but crush the competition.

Allow me to be clear. I am not anti Wal-Mart. I am not some kook who believes they are taking over the world or that they will one day own everything. In fact I believe they are well on their way out. Mark my words. It's just that this trip to Wal-Mart got me thinking about the life span of companies. Especially the larger corporations. In the end, one question kept presenting itself to me:

At what point does a company decide service is a commodity than can be slashed?

Venture (remember them?), K-Mart, Sears, and again JCPenny have learned or are learning the hard way that when customer service is not the focus the customers leave. They will find another place to go that offers them similar products and services, with a little more focus on the customer.

Wal-Mart would probably argue that they are making significant changes to improve our shopping experience. It's true they are making some changes. However new uniforms for their associates, cosmetic changes to their stores, and self check out lanes are going to be of little comfort to the customer standing in the long lines on an almost daily basis. Especially when they could purchase the same products somewhere else.

When companies resort to service slashing in the interest of making more money short term, they will almost always lose long term.


Chris said...

At what point does a company decide service is a commodity than can be slashed?

Until very recently, I worked for a company that Jumped that Shark about 2 years ago. Like Walmart, it also happened when the long-time CEO who built the place up from obscurity retired.

I also worked for Walmart back in the "Mr. Sam" glory days, and there's a very direct correlation between the two companies, and their probable fates.

When the new leadership took over, the customer-focused, customer-driven (old-school?) ways went out the window. The new leaders are numbers-driven... but they don't seem to understand that the customers drive those numbers.

Why can't otherwise intelligent people grasp such an obvious idea?

Andrew Weaver said...

"Jumped the shark" - excellent way of putting it. Many companies of gone the way of Happy Days, and many more will continue as they slash their services.

It is indeed new leadership/blood that often veers the company in a direction away from the customer focused ideals of the original ownership. I think Wal-Mart is one of the best examples of this.