American consumers spend, on average, 13 hours per year in calling queue with an estimated monetary cost of $38 billion. A third of complaining customers must make two or more calls to resolve their complaint. And that ignores the portion who simply give up out of exasperation after the first call. So why is customer service still so bad? Part of the answer is that a subset of companies purposely make callers jump through hoops with the hope that they’ll simply give up. When this happens, the company saves money on redress costs. At first glance, this may seem problematic: what about customer retention and brand reputation? Research shows that companies with a large market share — think airlines, cable, and internet services — can get away with bad practices because customers have nowhere else to go. This may help us understand why some of the most hated companies in America are so profitable.
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Why Is Customer Service So Bad? Because It’s Profitable.
“…a subset of companies purposely make callers jump through hoops with the hope that they’ll simply give up. When this happens, the company saves money on redress costs.” (Article summarising the paper “Why Customer Service Frustrates Consumers: Using a Tiered Organizational Structure to Exploit Hassle Costs”)