Why is Customer Service Still So Lousy?

by Andrew McAfee on July 13, 2010

I had a few phone calls with American Express Travel Services yesterday afternoon, and am so bewildered by the experience that I have to write about it.

The calls started with a pre-recorded message telling me I should expect delays because bad weather in the US had increased call volumes. Fair enough. But then Amex started dropping my calls. The first time it happened I thought it was my phone, so called back and then called from a land line. But as the calls kept just dropping off with no warning I realized it wasn’t me.

One time I got to stick around long enough to hear another message (that I couldn’t ignore or fast forward through) telling me that if I wanted to fill out a customer satisfaction survey I could stick around after my call was ended. I then got transferred to what I thought was going to be a human operator. Instead, it was the survey, which I couldn’t also opt out of or fast-forward through. As you might imagine, I gave Amex very low marks. Then I got dropped again.

Because I’ve come to expect this kind of service from large companies (especially older ones), and because I needed something only Amex could provide me, I kept redialing. On about the sixth call, I was connected to a very helpful travel agent who did his job beautifully. I imagine, though, that he has to spend a fair amount of his time apologizing to people for the technologies that got in the way of his ability to help them.

How can this still be the situation? How can it still be the case, in 2010, that really well-understood technologies (telephony, voice prompts, etc.) are still detracting from customer service, rather than improving it, at some of the largest companies in the world?

I can think of three possibilities here, none of which makes a lot of sense. The first is that Amex’s leaders aren’t aware of these kinds of service breakdowns. But how can they not be? All they have to do is dial the number themselves, or hire someone to do it and report regularly, and they’d know. But maybe they don’t make their own travel plans by calling up the Amex 800 number, and the kinds of problems I experienced don’t get adequately summarized in any report that they read.

I did respond to their misplaced customer phone survey, though (I had no choice), I did give them lousy ratings, and I have to believe that those ratings are summarized and reported somewhere. So the second possibility is that Amex’s leaders are aware of their customer service issues, but not terribly bothered by them. But again, how could they not be? They run a customer service business —   it’s all they do — and they just released a study showing that, as their headline put it, “AMERICANS WILL SPEND 9% MORE WITH COMPANIES THAT PROVIDE EXCELLENT SERVICE.” Even if you take a pretty cynical view of large corporations and believe that they don’t care that much about their employees, you have to admit that they probably care a lot about their customers, especially in industries like travel with lots of competition and low switching costs.

The third possibility I came up with is that Amex’s leaders know about their tech problems and are concerned about them, but aren’t going to do anything about them. Maybe they don’t feel like they have the budget, the expertise, or the managerial bandwidth to take on a tech-heavy project now. Maybe the issues I experienced only crop up in the particular segment of Amex Travel I was dealing with, or when call volumes are particularly heavy, and so the company is willing to live with them for the time being. But I’m a heavy traveler, the kind of customer they probably want to attract and retain, and I’m sufficiently struck by this lousy tech leading to lousy customer service that I’m sitting around blogging about it. So informed inaction doesn’t make much sense either.

Of the three possibilities, the first seems the most likely to me. In large organizations it’s easy for senior people to become divorced from day-to-day reality, and to see only what they expect to see, or what their subordinates want them to see. One of the great promises of today’s technology, though, is that it can provide a view of a company’s situation that is current and comprehensive at any level of detail, from highly granular to widely aggregated.

Terminated / dropped calls can be tabulated. Call volumes can be monitored. Survey results can be summarized. Employees can be polled. Customer sentiment can be inferred from blog posts, tweets, status updates, and other contributions to the real-time social Web. And all this information can be presented to decision makers at any level, at any time.

Not too long ago it was hard know how well knowledge work was being done, or to clearly hear the voice of the customer. But not any more. A consumer-facing company like Amex Travel can obtain and track its digital vital signs, and do so at higher levels of accuracy and lower price points than has ever previously been possible.

So why does it appear as if they’re not? I’m not asking rhetorically; I’m really interested in other people’s insights and experiences on this topic. Why don’t companies take stronger action to fix the technologies that are impeding customer service? Why aren’t they more acutely aware when things are not going well? Why hasn’t competition driven out lousy customer service, especially in contexts where switching costs are low? What have you seen firsthand in this area, or learned or read that made a lot of sense to you? Leave a comment, please, and let us know.

Casey July 13, 2010 at 1:06 pm

Maybe they figure all their competitors are lousy too (which they are) and they only have to be slightly less lousy.

Andrew July 13, 2010 at 2:01 pm

‘Few companies invest in strategies for good customer experiences’ too true. Good comment. But it does not have to be “too expensive”. Do the math AMEX, customers must speak aloud. Reject and comment poor CX. It is our right and obligation.

Barbara McGill July 13, 2010 at 2:24 pm

A couple of years ago I worked with a health insurance company that wanted to improve their website customer experience. During a cross-functional working session, one of the employees told us he had used their website to check his own benefits and make a change. I asked him how it went? He said he didn’t know if the change went through or not. The site took so long to finish the change that he left and surfed elsewhere while it timed out. He had to call his own company’s customer service to find out if the change went through. When I asked if he didn’t think this was a problem to report, the light bulb went on.

I think employees experience these issues but don’t think they can do anything about it. They just accept problems on their telephone and computer systems as normal. It’s not that they don’t care, but the complexity built into large organizations and the difficulty in getting IT changes done, make the task seem impossible.

Guest July 13, 2010 at 2:34 pm

I believe most of their business is corporate where senior leaders to senior leaders agree on things at the top. Then, real users are locked-in to using their services and have to deal with the day-to-day reality of poor service. Senior leaders are insulated from the reality of the system by concierge numbers and admin assistants. Real people suffer in the monopolistic corp. lock-in, but no one cares because it is all a cost optimization game.

Steve July 13, 2010 at 4:36 pm

Not defending them, but when your a Sr. manager and just running a spreadsheet, you can calculate the cost of dropping a few calls in a thousand/ten thousand/hundred thousand knowing that most will call back. You can cut support tech costs to achieve this ratio and even do recast down how much a company would save degrading their service. They probably been knownhow lowmtheir service has to go until a customer defects, which in your case seemed impossible.

What they can’t calculate is the value of good customer service, how ,ouch business they’ll keep or gain by high-levels of top notch customer experience, etc. Until that can be quantified and matched against cost curing, lowering actions, manager will always chose to cut service as it’s a demonstrable, bottom line affecting action.

Uma Sharan July 13, 2010 at 6:07 pm

I am just speculating this, but maybe they are aware of this problem and are in the process of resolving the issue. Have you consistently face this call dropped problem at Amex or was this a one time issue?

At the same time I do agree with you about lousy phone tree system. Once I was bumped around for 3 days by Sears from one department to another about free installation with oven purchase. One department said I was entitled for free installation another said I am not, even though it clearly said on their web site that installation is free with Oven purchase. Their response was, “It is a misprint on website”. Finally a very good sales supervisor resolved the issue by asking us to pay for the installation but giving us a discount of the same amount towards the price of the oven. So yes big corporations do mess up with their customer service and there was a complete disconnect between the different departments at Sears. I hope at least for Amex and Sears to pick up this thread and do something about it.

And yes even a one time bad experience is enough to lose a return customer in this highly competitive market.

Melinda July 13, 2010 at 6:15 pm

Having just attended an interesting conference and being part of a community of leaders who work hard every day to improve customer experiences, I can appreciate your question. And, in recent discussions, two things emerged as V-8 moments for me:

1 – Executives think they know best; they think they are doing a good job, and no amount of customer feedback or data is going to change their minds. That data can be worked into their current mental models and all is well. (This isn't true in all cases, but a recent Forrester survey shows a huge disconnect between how execs think they are doing and how their customers think they are doing.) A new crop of better leaders are growing, but it's going to take time for companies to really get the fact that a poor experience can break the relationship, permanently. (Look at what has happened to Blockbuster. Those late fees and the way they treated customers made it easy for NetFlix and now Redbox to come in and take their customers. Blockbuster is a place many people will never do business with due to poor policies and poor customer service.)

2 – Few companies invest in strategies for good customer experiences. It's expensive, it's inconvenient, and they'd rather come up with strategy by sitting around a table (not talking to those customers who might confuse the issues by not understanding something). That may sound harsh, but good customer experiences take time, money, and effort, and a mediocre one may actually be “good enough”. (Especially if you're embedded with a company, like you are with AMEX travel.)

You're also being extremely optimistic (which I love) that execs could simply test out their own services and see for themselves. Having watched executives see products fail in usability testing more than once, I've heard them make excuses about technology, processess, the wrong user, etc. Making them aware of problems is a tough job. It's like telling someone their baby is ugly. You don't get rewarded for that kind of work, nor is it appreciated, UNLESS the business leaders have been watching trends and realize they must change. (Change is brought about because you're in pain. I'll keep wearing those cute, moderately uncomfortable shoes, but as soon as I'm in pain, I'll get some others.) We've become so desensitized to poor experiences that we're willing to put up with them to get what we want. Change is hard for customers, too. I am sure that you would be loathe to leave AMEX due to the hassle. Therefore, AMEX doesn't incur any real pain – they keep your business, and they can't truly measure how your irritation affects their bottom line. They keep making money. Yes, they could make more, but they might not have the bandwidth for more customers like you. Everyone likes to think their the type of customer that a company should want to make happy…

Guest July 13, 2010 at 6:38 pm

Surely, Operations monitors customer feedback to ensure optimal service. That said, there is a difference between the service that one gets from an actual Rep vs the experience on the Voice Response System.

It sounds to me that the VR was dropping the calls, which led to frustration and dissatisfaction. I agree, this type of disruption should not happen but I would not ding the Rep and lump it as the entire Customer Service was lousy.

What I've done in the past is to raise it to the Team Leader in addition to completing the Customer Survey. One assumes actions are being taken.

Anonymous July 14, 2010 at 11:39 am

The service you experienced at AMEX isn’t an exception. Unfortunately, it’s more the rule in an environment, where budgetary concerns prevent the proper staffing of call centers. Compounding the issue is the use of offshoring to staff up call centers. Certainly, the workers are smart however, because of the language issues, people frequently get poor service or frustrated with the language barrior. Too many business decisions made for a short term gain instead of the long term approach.

Wilson Zorn July 14, 2010 at 4:21 pm

This is a great topic. I feel that a major problem is there's simply no feedback chain that properly conveys the proper details. Granted, in the case reported here the specifics of dropped and incomplete calls should be observable by objective reporting, and this one element I'm going to speculate was a momentary issue, as in my experience I've never had that particular problem with AmEx, and other companies I've had it with it's generally been a one-time thing. But to the issues of navigation and voice recognition and the general flow of automated handling, and also beyond that even to the topics of general bad customer service PROCESSES, here is my take:

1: the surveys that one fills out rarely get to the level of detail to tell management WHERE the problem is; instead those surveys focus more on “quality of your experience”, “did you get what you wanted,” none of which will really tell the organization where the process/flow/navigation failure is; I speculate that once the reporting is done they then simply focus on the human element, which is (in my experience) less often the problem than process failures, so some poor customer service representative gets dumped on, bearing the brunt of the blame; if the problems are widespread, as they are with process issues, then it's even worse as the org can only focus on the worst reps, who probably have other legitimate issues, and the org then also believes (falsely) there's a general training problem or other general problem with their representatives (morale, etc.) and continues to focus in the wrong place

2: there's a horrific, in my experience, feedback breakdown in many organizations in terms of what the customer-facing representative is expected and/or enabled to do; my experience here is that when I talk to a representative about problems with their phone system or any other process or policy problem, the representative too often says “I can't do anything about that” and will even sometimes outright refuse to take my complaint, instead saying “you have to report that to another department,” and after that I rarely have the time and energy to do so, frankly; also, I've heard representatives say “sigh, you're right, nothing I can do about it” and when I say “please tell your manager; if your manager keeps hearing it, they have a responsibility to do something” I often get a clear sensation back that either they feel their manager is uninterested or unwilling or the organization is so bureaucratic and paralyzed that they feel it's hopeless to bother trying

And that latter point is really the biggest problem in my view. An organization only really hears the details of policy and procedural problems in its front line, via its customer service representatives. If that front line is not actively trained and motivated to collect and forward that critical information (let alone being empowered to directly fix something) then that is the key weakness via which the problem will simply be perpetuated as the organization remains effectively (willingly or otherwise) ignorant. I stress it's not even a “bad” (poorly run, demotivating, unengaged, etc.) organization that experiences this; rather, even organizations that are otherwise well-run experience this as too often the person on the front-line simply is overwhelmed or simply adequately busy with what is presented as their core job of taking and fixing an immediate customer service issue to dive into root causes or to report “tangential” issues like bad voice recognition or other such things.

Wilson Zorn July 14, 2010 at 4:24 pm

You hit a fundamentally important and difficult point: to get that 9% additional spend by a customer might cost a company 20% more than what they are spending to improve customer service. In that case a “merely tolerable” or “barely adequate” customer experience translates, for the enterprise, to “good enough.”

That said, there might be creative ways companies haven't considered, such as peer forums, etc..

Steve Bell July 14, 2010 at 5:08 pm

I think we all have experienced this or similiar experiences throughout the years. Some would say that customer service has gotten better or worse. For me, I would say it pretty much has remained the same over the years. We have a cycle of caring about customer service but at the end of the day it all comes back to the bottom line. Is great customer service worth the price?

How much does a business need to spend to keep or attract more business?

I listened to my wife's experience the other day with a credit card company – she had paid off this card, in order to stop doing business with the company. Paid off, just to get a late charge and interest on that late charge. Looking back – we noticed a pattern to that behavior. When calling customer service – she was bounced to 4 people, with no resolution. Frustrated… After 30 or so minutes – someone did call (after listening to the recording) and take care of it. Fact, is the outcome was okay – the experience was not. Still lost a customer.

If people are truly sick and tired of bad or poor customer service – the only message to send it leave. The more folks that leave – then maybe, just maybe something will change.

Beth N. Carvin July 18, 2010 at 10:14 pm

My guess is that somewhere along the way the company spent a lot of money to switch to a new technology, outsource provider or vendor which is now not living up to expectations. It may have been a cost cutting move or it may have been intended (ironically) to provide improved customer service.

Unfortunately in situations like this, there is so much time and money invested that it's often difficult to extricate yourself gracefully. There also might be multi-year contracts involved.

If the kind of experience that Andy experienced is widespread rather than a one-off anecdotal incident then I suspect there are plenty of folks in management who are well aware of the issues. (Though they may or may not be shielding exec management from it.)

It's likely that they are already thinking about, planning and/or implementing changes as we speak.

It would be nice if someone with power could say, “GET THIS THING FIXED NOW!” but it doesn't usually work that way.

sengseng July 20, 2010 at 4:51 am


bmagierski July 20, 2010 at 2:25 pm

Andy – this is a horrible experience that you outline and clearly unacceptable. Does AmEx offer you other channels for support? Per a lot of comments here, companies are striving to drive down support costs while increasing the quality of the experience and end result. The phone is a high cost and relatively unsatisfying channel for support, unless speaking to a person or going up the chain to resolve a problem is necessary.

I'm wondering if another channel, such as a Live Chat, would have been able to address your problem. You get a live person interaction, but in a way that allows you to multi-task and not have to weave through a blind menu of items on the phone.

Call deflection to Chat and Twitter support channels allow a company to get cost leverage in that agents are able to support more requests simultaneously and the end-user consumer gets a direct line to a person without the interfering phone menu.

What AmEx should have, at least in times of high call volume, is an opening statement that Chat support exists on their website as an alternative option.

Moreover, if you are a frequent / good customer, you should be able to get some preferred level of Chat or Twitter support.

At the end of the day, companies are driving down support costs through call deflection. This is a case of horrible call deflection by design or failure or both. The best companies are driving down their costs through call deflection, but the deflected leveraged channels of support should provide a superior experience and all should be intertwined into a total customer experience allowing the customer to choose the base channel for support and providing excellent support across all channels.

Mundo July 21, 2010 at 5:14 am

Andy, I run a large American Express group (American Express Network) in LinkedIn. It has over 7,600 members who are current or former Amex employees — Kenneth Chenault and a number of senior staff belong. I have posted this blog page in the discussion section of the group, hopefully you will get a reaction. Many years ago I worked at Amex, BCR (before cost reduction), and these issues were rare, unfortunately, in the new world order, cost management not customer service is the driver in most companies.

Mona Masghati July 21, 2010 at 3:18 pm

from: Christopher Meyer and Andre Schwager “Understanding Customer Experience” in HBR in 2007

Customer satisfaction is hard to measure, there is a fear of what the data will reveal, it is easier to focus on measurable financial goals (although customer experience feeds into/significantly impact such metrics)

“The Customer experience does not improve until it becomes a top priority and a company’s work processes, systems, and structure change to reflect that. When employees observe senior managers persistently demanding experience information and using it to make tough decisions, their own decisions are conditioned by that awareness.”

m2309a3 July 21, 2010 at 4:28 pm

The problem I've been having with Customer service is that, more often than not, the customer service representatives that I FINALLY get a hold of, have no power to make any decisions or change anything manually to help me. I have called, in the past week, AT&T, Apple, UPS, my Gas company, United Airlines, and USPS. When I finally got through, all the representatives could do was “sincerely apologize” and tell me that “my only option at this point…” Basically, companies have CS Reps out there who can read off customer information from the system, but as far as HELPING the customer get something done, they're useless.

Powerless representatives, in addition to faulty automated systems, is what makes Customer Service so unbearable. If you don't believe me, next time you're expecting something from UPS, call them and try to get them to have the driver call you when he/she arrives because your doorbell isn't working… Impossible.

Mundo July 21, 2010 at 7:33 pm

The irony of this post is that Amex used to be the gold standard for customer service — operations staff were recognized and rewarded for taking heroic measures to assist customers.

Nick Brice July 22, 2010 at 2:26 am

I think it because the distance between customer facing people and senior decision makers is such, and the administrative/political burden on leaders so great, that some of the simple habits, checks and balances that need cultivating to sustain a world class service culture drop below the horizon. What you can’t see doesn’t hurt – so we are working on creating powerful immersive real-life based customer and employee experiences to help senior and middle managers become passionate about making service a core value.

Today’s and yesterday’s world for many has been based on core values of profit and shareholder value – mostly in the short term. Working hard on customer service for those doing well has not been of primary interest as the perceived reward is longer term.

Online IT Training Courses July 28, 2010 at 12:00 pm

Customer satisfaction is the last and important part of selling process which include response to the customer’s query and solve it immediately. But in reality hardly few companies found who follow this exactly. The tragedy is that it called customer care where nobody cares about customer.

Steve Freeman August 2, 2010 at 9:22 am

It sounds like Amex have tuned their customer support appropriately, since you haven’t left and probably don’t have an alternative.

In the meantime, this isn’t really a technical issue. You might want to take a look at the work of John Seddon who applies systems thinking to service organisations.

MPD Digital August 8, 2010 at 7:29 pm

The difference is a small business can not afford to treat folks like this! http://mpddigital.us

Sophie August 10, 2010 at 5:59 pm

This is really interesting! I agree with few of the folks that comments on this post…especially Beth N. Carvin. I have work in a multinational company who have outsource the customer service to vendor. Since, customer complaint increase significatly. To my perception, the deal was good financially wise on short term…but not for long term! When company do that type of transaction, usually it's for $$ reason…For me it's not just a technology issue, it's a priority issue. $$ vs service…(I thought it was going together…) The company exist because of customer. Customer service is the heart that make the machine work….I am not saying that vendors or not doing a good job…but as a company you want to have that previlege relationship with the people that make you exist and serve them (end to end process) with the quality they deserve! When the transaction is done the benefice are there, down the pipe customer service complaint increase, it's hard for the executive (that was hired with a specific mandate..) , when a lot of $$ and effort was invest,to say, ''We are sorry, we thought it was a good thing for the company but visibly it was not that good!''….http://bit.ly/aQ6i0t Just my thoughts!

robertbacal August 17, 2010 at 4:56 pm

There is no mystery here, and I've written about why customer service is so bad, but people don't want to hear it. It's bad because company's don't have to improve it. It's bad because the costs of improving it generally outweigh the costs of the consequences of not improving it. Because, generally, it's good business.

Large companies aren't stupid. They understand the realities of their marketplaces way better than any arrogant outsider who claims otherwise. They “get it”. They DO understand their customers, far better than you or most people making all the noise about customer service.

The data we have access to, such as the survey data on what customers SAY they will do is worthless, and misleading. Virtually ALL of the data is equally bad.

I like to have great customer service too, and I wish it was better, but it's pointless to ignore the business realities that drive decisions that result in lousy customer service.

robertbacal August 17, 2010 at 4:58 pm

Steve, they won't “leave” en masse (at least it's rare) because customer service per se is only one factor, and sometimes a small one, that influences who goes where. Besides, customer service within a sector is pretty much the same across the board. There IS no place to go, often, even if one wants, where service is consistently better.

robertbacal August 17, 2010 at 5:00 pm

Great comment. “good enough” IS what this is about. WHen a bear is chasing you, you only have to run faster than the slowest guy. Same in customer service. There IS no such thing as free customer service. Every improvement costs to do it PROPERLY.

Walter Ramirez August 23, 2010 at 6:52 pm

Service is bad because people do not complain. One month ago I cancelled my American Express Platinum Card after many years, because of lowsy services, and specified them. I got a call from a top executive from Amex, ensuring a direct response to each of my complaints and granted me a free of charge card… It works to complain…

Daniel_r_wilson September 29, 2010 at 11:27 pm

Just today I asked an appliance repair service to visit my house on the day next week that I could be their first stop. Turns out they plan their routes each morning, and they can make me no promises. The burden is on me, not them. I joked with the nice lady taking my call. We agreed that she is constrained by company policy. Perhaps the arrangement works for the driver’s convenience. Talking to the boss would simply provide proof that the way they do it is the way they do it.

Some of the reasons these absurdities continue:
–The boss is told that the company improved on three of the ten performance factors that are measured. That is usually good enough for most bosses.
–There is a layer of management that is impenetrable, and they support the way things are going.
–The boss has no idea what customer acquisition costs, and he compares that “big zero” to the cost of specific line items that he can control.
–When he wants something, he gets it, so what are these people’s problems?
–Company policy has some kind of mythical importance in the minds of the people who create it.
–The stuff the other people said here is right on too.

Mold Testing Moreno Valley December 13, 2010 at 7:09 am

Service is bad because people do not complain.

parça kontör April 11, 2011 at 7:34 am

Very encouraging to hear ..Thanks..

Comments on this entry are closed.

Previous post:

Next post: