Why it is so Difficult for Customer Service to be a Competitive Advantage?

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It is shocking how many companies seem to truly believe that their current customer service operation is a competitive advantage. The drumbeat of customer service as a strategic differentiator is used by virtually every organization and vehemently defended when confronted with reality. While it is certainly politically correct and seems to actually make sense, this one is so far from being true that it is laughable (or just plain sad).

Now let’s be clear, it would be wonderful if the way that customers were treated in their interactions with our organization were really the cornerstone of our competitive advantage. The entire business would be focused on maximizing the delivery of the value proposition to the customer and each customer would feel that they were truly important to the company. The customer would bypass your competitors in order to get the experience that they have when doing business with your company.

Often believed, this is generally blown up with just the slightest bit of competitive analysis. Let’s not convince ourselves that we are so much better than our competitors by listening to the adulation of our most vocal supporters. An honest analysis of how our customer service efforts are delivered must be compared with the reality of the experience with some (probably not all) of our direct competitors. Being marginally better than competitors is not game changing. Pointing out inconsistencies in treatment by competitors must be weighed against the inconsistencies in treatment by our own employees. Competitors have raging fans as well.

Consider so many of the classic experiences we have with organizations. When was the last time you felt that the customer service at your bank, gas station, cleaners, utility, fast food restaurant, lawyer, doctor, consultant, public service employee, university, or you name the organization was so consistently extraordinary that you felt the operation was just different? The answer is not much AND definitely not CONSISTENTLY.

A basic tenet of Strategy Implementation is that the elements of your competitive advantage must be CONSISTENTLY experienced by the customer regardless of the employee they are interacting with. Instead, despite all the investment, talk and management firepower aimed at improving customer service, the reality on the ground is:

“We can’t refund your money”

Are you kidding me? Give your money back to you? You won’t spend it with us.

“Our systems don’t allow us to do that”

They were designed in a patchwork system by IT folks who don’t deal with customers and are backlogged 13 months.

“You needed to show us that first”

Prove we owe you something by filling out a ridiculous form, then we will evaluate whether we agree – and BTW, we don’t!

“I know we said that, but….”

Hey, sometimes we’ll say anything to get you to buy from us. This is especially true if we can throw this off on a former employee.

“That is the way we handle all customers; you are not being treated unfairly”

Bad is as Bad does and we do Bad really well – get used to it

“I wish we could do that but ….”

It is not my fault that we won’t accommodate you. I am simply following the rules that were set down for me by a management team that is trying to maximize EBITDA for their annual bonuses.

“Could I put you on hold?”

Not really a question. Really means I’ll get back to you when I’m ready, not when you need me to be ready AND certainly not now.

“Would you read me the message on your screen?”

We expect the customer to be our quality control and only help them navigate their way through our maze.

“The manager should be back shortly”

You are clearly asking for special treatment and that will cost you time!.

Customer Service is far too generic a concept to be of Value as a Competitive Advantage

I’m sure you can add many more quotes to the refrain of “Customer Service is NOT the most important element in our business” mantra and therefore not one of our competitive differentiators (I've barely scratched the surface of those).

For the VAST majority of companies, customer service is just table stakes. It is one of those areas where the company needs to be within a reasonable distance of average when compared to our competitors (actually measured as median by strategists). Some industries have a very high median level of expected customer service while others are simply abysmal (can anyone say the airline industry?). In most industries this expectation bar is constantly moving up, so investment and general improvement in delivering customer service is a virtual mandate... that does not make it a differentiator.

A lot of money spent beefing up what passes for customer service is only of value if the company can achieve a consistent level of service that is SO FAR ABOVE the competitors that customers truly recognize the difference. Customers would see that level of service and attention as a reason to bypass competitors and only buy from you.

For this to happen, the organization must get underneath this big, concept term called Customer Service and focus on the elements where we truly believe we can be exceptional for a sustained period of time. This generally means that we need to find 2, 3, maybe 4 areas of delivering the Value Proposition to the customer where we can truly separate ourselves from the competitors. Then, take those elements and focus everything in your customer service group (and for that matter your whole organization) on excelling in those particular aspects. We tell everyone that customer service in general is important, but that the focus of our advantage is not generically ‘do good’ but is specifically about these areas of real excellence.  

Otherwise, it is a waste of time, money, mental firepower, and resources to do much more than what is expected in your industry. In other words, customer service is only rarely part of a strategy; mostly it consists of empty words into which companies pour money. Either do this in a focused manner both remarkably and consistently or spend your money on something that actually makes a difference.

BE VERY WARY OF CUSTOMER SERVICE AS A STRATEGY!