Last week I wrote about my feeling that 2008 might be a key year in the transition to an IT-based knowledge economy. I focused that post on one of the key indicators of that transition, namely the emergence of the kind of global technology platform that is needed to support an information-rich, knowledge-based future.
A sophisticated IT infrastructure - with the vast amounts of information and services it makes possible - is necessary but not sufficient for a business to succeed in our global, knowledge economy. The biggest challenge, even bigger than building the advanced IT infrastructure in the first place, is figuring out how to put it to work for competitive advantage. This is particularly critical given an environment where competitors with innovative business models can now much more easily show up from anywhere in the world.
Given all the possible innovations a business can focus on, is there any one in particular that stands out above the rest? I think so. I have become increasingly convinced that consistently strong customer service is the key way for a business to differentiate itself in our increasingly global, commoditized and hypercompetitive knowledge economy. With more choices than ever, we want those companies and brands that have won our allegiance to deal with us as if they really care about having us as customers. This isn’t easy to do. In fact, it’s one of the hardest tasks facing any business.
I recently read a very good column by Joe Nocera in the New York Times that nicely illustrates the value of customer service in a very personal way.
This last December, Nocera ordered a PlayStation 3 from Amazon, a $500 item, as a Christmas present for his son. A few days before Christmas, the present had not yet arrived, so he went to the excellent Amazon web site to track the package and found out that it had already been delivered to his apartment building in New York. In his absence, a neighbor had signed for the delivery and left the package in the hallway, believing Nocera would find it when he got home. But it wasn’t there.
He writes, "Now I was nearly distraught. In all likelihood, the reason I hadn’t seen the package earlier in the week is because it had been stolen, probably by someone delivering something else to the building. Even if that wasn’t the case, the one thing I knew for sure was that it was gone — for which I could hardly blame Amazon. Nonetheless, I got on the phone with an Amazon customer service representative, and explained what had happened: the PlayStation had been shipped, delivered and signed for. It just didn’t wind up in my hands. Would Amazon send me a replacement? In my heart of hearts, I knew I didn’t have a leg to stand on. I was pleading for mercy.”
“I shudder to think how this entreaty would have gone over at, say, Apple, where customer service is an oxymoron,” the column continues. “But the Amazon customer service guy didn’t blink. After assuring himself that I had never actually touched or seen the PlayStation, he had a replacement on the way before the day was out. It arrived on Christmas Eve. Amazon didn’t even charge me for the shipping. My son was very happy. So, of course, was I."
I like doing business with Amazon. They have a great IT infrastructure that enables me quickly to find what I want, order it, and track the shipment better than in just about any other site. But above all, in lots of small ways, they act as if they really care about me as a customer. I am not at all surprised by Joe Nocera's experience.
Why is good, consistent customer service particularly important for a business, especially at this point in our transition to a knowledge economy? Because the global economic commons isn’t being built on an elite cadre of “experts,” but on a vast population of empowered individuals. In other words, a “knowledge economy” isn’t only about what is known, but also about who is doing the knowing.
Today, that’s all of us. And most of us are pretty busy, living our lives with the stress needle close to or into the red zone. There is a lot in our lives that is beyond our control – air travel, the relentless demands of our jobs, an unexpected family crisis. So, when we deal with a business, more than anything – perhaps even more than a low price - we want everything to go smoothly. We want no hassles. And when things don’t go right, as is inevitable, we want the problem to go away quickly. A business that can make that promise to us - and keep it – is a business that we will keep dealing with over and over.
Until recently, if you had a bad experience with a company, you had little recourse beyond no longer dealing with it, telling your friends, perhaps writing a letter that might or might not be read or answered by anyone. No longer. In our new world of social networks, blogs and the like, news travels fast online.
Disgruntled customers can truly cause havoc to a business and damage their brands – especially if the negative experiences they are writing about resonate with others out there, who add their own negative stories, until the business is truly facing a public relations crisis. Examples abound.
The opposite is also true. In his column, Joe Nocera talks about Amazon’s CEO Jeff Bezos and his relentless emphasis on customer service, which is not always appreciated by Wall Street.
He writes, “What [Jeff Bezos] has viewed as money well spent — building customer loyalty — many investors saw as giving away money that should have gone to the bottom line…. Maybe, just maybe, taking care of customers is something worth doing when you are trying to create a lasting company. Maybe, in fact, it’s the best way to build a real business — even if it comes at the expense of short-term results."
At the end of his column, Nocera mentions Bezos’ belief that if you do something good for one customer, they will tell one hundred others. Clearly, that number is much higher if the good deed catches the attention of the blogosphere, let alone if it results in a column in the New York Times.
Put it all together, and you begin to see what a truly empowered, truly knowledge-based global economy looks like.
I couldn't agree more. Customer Service has always been critical and as closely related to success as a good product. Add in the multiplied pressure that common customers can now put on companies and its importance is higher than ever.
I think it bodes well for our country too. As we become more physically separated because technology allows us to do so, it is nice that more folks will need interpersonal skills.
Also, I worked at a company that also valued customer service. It was a great experience and helps in almost any field I go into now. Who knew?
Customer Service used to be like the mail room, sidelined for more important departments. Maybe that will change...
Posted by: Steven Mandzik | January 12, 2008 at 07:48 PM