The Demise of the Customer Support Experience

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BPO (Business Practice Outsourcing) and miss-guided ‘improvement’ efforts from a silo-oriented optimization view are usually the main culprits for making customers run the “Customer Support Gauntlet.”

The Demise of the Customer Support Experience

There is an old saying that goes something like this: “The road to Hades is paved with good intentions.”

Sometimes in our quest to find savings and try to improve the customer’s experience things can go wildly astray.  I will share a current, personal ‘customer experience’ adventure you may relate to.  Then I’ll explain the possible root causes and estimate the true ‘bottom line’ costs of misguided business process outsourcing and ‘improvement programs.’  Finally, I will provide some thoughts about a way forward.

At the time of this writing, I’m on a mission to recover from trying to replace an old refrigerator that went on the fritz – almost 5 months ago.  I’m not sharing a full blow-by-blow story; rather a condensed version.

Running the Customer Support Gauntlet 

Our experience began when we bought insurance coverage for our major appliances from our power company.  We failed to read the fine print with that agreement.  After waiting an hour for a callback, I talked with the service representative:

Me: “We have power to the refrigerator, but the freezer has quit working – only the food on the bottom shelves is staying frozen – looks like an electrical issue.”

CS Agent: “OK, sir, we can get a technician out there, hopefully sometime next week.”

Me: “What do I do with my food for a week?”

CS Agent: “Sorry Sir,” that’s the soonest our contractor can get there.”

Me: “OK, but I’m telling you we have an ELECTRICAL issue, please send the tech to fix what I think is an Electrical problem.”

A week later the tech shows up, does the diagnostic and determines the problem can be caused by a few issues.  Alas, no parts on hand.  “Sir,” the technician explained, “we will now need to order the parts,” and before that happens, they will have to approve the repair.”

Ten days later, after a week of delay to get approval to repair – which I had to call and ask about – the technician and parts arrived.  After working on the unit for 3 hours, the technician explained: “It’s the motherboard, they quit making those parts years ago.  Sorry.”

He calls it in, and I then get back on the phone and call his supervisor to complain. And……to my delight, it turns out that that particular problem is not covered by the policy we bought.   Seems we did not buy the “premium” policy for replacing un-repairable appliances. After going two weeks of delay, we now need to buy a new refrigerator.  Little did I know we were heading down a slippery slope with our next, next ‘customer experience.’

Years ago we had purchased a new freezer from a large national retailers’ ‘scratch and dent center.’ It was just a small dent in the door and worked out well.  So, off we went to see if we could save little money again.  We located a nice side-by-side with the in-door ice maker and water dispenser with electronic controls for temperature settings and such.   The dent was where we would cover it up with a little note holder; my wife is soooo clever!

The morning after they delivered it I saw water puddled on the floor, and after pulling out the bottom drawers, I saw that the plastic water reservoir was smashed and leaking.  Since this was a ‘new’ refrigerator AND we had purchased their extra warranty protection, I did not expect any issues.  Guess we should have read the small print more closely. (Does anyone actually read through all those tiny font disclaimers? Or is the real question: can anyone read that tiny print?)

After discovering the puddle, I called the store first and was given the number for service.  After calling the service line and waiting about 10 minutes, I explained:

Me:“Look, the plastic reservoir on the inside that holds the water is smashed – send the technician with the part.”

CS Agent: “Sure.” And then she explained it would be 4 days before the tech could get there.  Four days later, the Tech arrives without the part.  When asked why the missed communication, the tech responded with something like: “We are a contracted repair company and not authorized to order parts until we inspect the unit.”   “OK,” I said, “will someone run that part over today?”  The poor technician replies: “Sorry sir, the closest part is in Texas. (We live in Michigan.)

“They will ship it out ground in the next day or two, and when it arrives, you can call us so we can schedule the repair,”   he mumbled as he walked out the door.

We wait the 4 days for the parts and then call the service line, only to find out the soonest they can come to install the parts is in 3 more days.

After that repair was made and we had water flowing, I noticed something strange; the freezer was not making ice.  It was reading zero degrees Fahrenheit on the door gizmo, but nothing in the top of the freezer was frozen.  I took a deep breath and placed another call to service, which resulted in being transferred to a technical service person, after an added ten minutes of listening to a poor harmonica rendition of Glenn Campbell’s famous Wichita Lineman.  Once on the line, the technician explained how to ‘reboot’ the unit by powering it down and back up.  Assured that rebooting would handle the problem,  I waited a couple days but saw no improvement. No ice. I repeated the reboot a few more times.  Made another call to service and after explaining what we had done, they agreed to send another tech…… in just 3 days’ time.

The break-fix failure cycle continued from there.  A diagnosis of failed sensors was then decided to be the real culprit.   Five days for the parts, then another 4-day delay for the install.  No dice on the fix, again.  A new motherboard then became the prime suspect.  Thus another two weeks for the part and then the wait for the inevitable “install.”  Still no ice.  It’s been two and one-half months now, and we are freaking out! Back to the small print where we notice in the warranty agreement that they must replace a unit that’s not repairable.  Now, we were in a frenzy and ready to spin out of emotional control. But…..the following insult to injury, so help me, is a true story.

Once again, I call the service line and inform the poor girl who answered that we were done messing around, and we need them to honor their replacement warranty – after all, we bought the extra insurance.  After an audible gasp, she explains that insurance coverage is a different group and gives the number to call.  I call them, and after going through the whole rigmarole of establishing who we are and all the details again, the support person says:

“Oh, this has to be handled by the original equipment manufacturer’s warranty – that is, (you guessed it) a different group.”  Armed with a new phone number for my rant, I spoke with jaw muscles flexed with the next person and repeated the now memorized immortal damage being perpetrated on the lowly customer.  After some shuffling around and waiting to check with the boss, the new poor agent told me I now needed to call the store where I bought it to get a replacement.

Onward I pugnaciously forge ahead,  and now making my fourth call, and when the folks in the appliance area at store finally pick up my call (that was on hold for 15 minutes), I again pleaded my case. While I’m making my emotional plea for help, I overhear the agent carrying on a side conversation and not really paying much attention to the now crazed customer on the line.

Hearing the lack of interest on the other end, I demanded to talk with the manager.  This unfortunate manager, who picked up the phone (15 minutes later) after being forced to endure a medley of unintelligible rap songs,  he got to hear me explain what I had just gone through (with my sternest voice) and I demanded some satisfaction.  As if on cue, the manager said:

“Sorry sir, according to the contract we must make four attempts to repair before we can declare it un-repairable and replace it.”

Stunned and defeated, – you guessed it –I called the store and got the original service agent on the line.  After abruptly asking to be escalated and holding for a supervisor whom finally said they determined they could expedite service and get someone out the following day.

I’m ecstatic.   A universe in adjustment!

The following day they call me at the time the technician is supposed to be there – and I learn it will be two more days before they can show. All the past emotions of the struggle re-surface. I decide that I must be a modern version of Job.

The beat goes on. They send a different technician this time.  Am I guessing this tech is their ‘A’ player?  But before he can open his toolbox, he almost leaves without working on the unit after my wife rips into him about our gauntlet of customer service agony.  I ask her to go to another room and punch a  pillow and then talk him off the ledge.  He decides to say and opens the back of the refrigerator to dig deeper.  His diagnosis is that someone had previously tinkered with the compressor, and we would need a new compressor and plumbing for it.  That meant a 7-day wait for the parts to arrive and then another 4 days for rescheduling the repair.

This time TWO technicians showed up and spent 6 hours working on the unit.  They decided that the problem was not the compressor – it checks out fine (Why did that not happen on the last visit?’).  They declare the problem is, in fact, the in-door ice/water dispenser gizmo.  And, can you believe it, they actually had the part with them!  It turned out they had been having this issue with these particular units before. They replaced the part, turn on the refrigerator, check things out, declare victory and leave.

Five hours later we open the refrigerator and find out that it has quit working altogether.

I call the store and talk with the poor manager I talked to last time.  He can’t help me over the phone – we now have to come to the store to resolve things.  Upon arrival at the store, for the first time, we got an audience with the overall store manager – yeah!  He offered to help facilitate getting a new unit, but could we, please look at what they had in stock?  Reluctantly we did so and found a different unit from another manufacturer.

After they delivered the new unit, the following day we cleaned it and started to put our stuff in it.  Guess what.  The lights in the freezer don’t work.  After a call to service and the requisite wait,  the technician came and worked on it for 6 hours.  It was determined there was an integral short in the wiring the refrigerator that it is… wait for it…  unrepairable.  Since this refrigerator actually did get cold inside, we are taking our time to get it replaced after we decide what unit we want.  I am hoping that will be a better experience.

Back to that thing on the road to Hades being paved with good intentions

Customer support contact centers

I know our experience is not that unusual and often, there are inherent flaws in customer call handling and resolution processes. After all, you are dealing with human beings who may not have the proper training or work with poorly designed processes. Indeed, separate functions or departments handle different aspects of the customer experience; and if there is no central point of contact, an inevitable breakdown in communication is the result.  Years ago, the retailer we bought the appliance from handled the repairs and warranty too, with a single call.

The advent of business process outsourcing (BPO) has spawned a litany of extra steps that are functionally separated by design or necessity.   Now, one might argue that it’s unreasonable to expect a single call technician to handle all aspects of a customer’s needs – that would need to be a highly trained, expensive resource.  That’s correct if you look one-dimensionally at the problem.

Let’s look at the reality of my experience with the retailers’ customer support structure.  To handle my one request, I had to spend hours of my time on the phone (becoming progressively more hysterical… oh, wait, that’s not part of the calculation) talking with 4 different people 5 times about my issue.

Let’s analyze a bit.  That’s 4 different IVR and Workforce Management, ticketing and knowledge base systems in play.  Wonder what that costs per hour?  In addition, if we pay 4 people $25 dollars an hour in fully loaded costs for 2 hours of effort versus 1 person for 45 minutes at, say $50 dollars an hour, which is more cost-effective?  That does not take into account the cost of 4 sets of infrastructure.  

  • Probable root causes:

Past short-sighted BPO decisions to shave costs and boost stock values along with narrowly applying ‘process improvement’ methods within functions, versus looking at the end-to-end impacts to the entire value stream and customer experience.

  • Repair operations policy and network design

Without worrying too much about the poor customer who is going into 5 months of trying to get a fully functional product, let’s look at the true end-to-end value stream costs of the repair cycle.  First, let’s tally the activities for the first un-repairable refrigerator. (Delivered with a broken fluid reservoir.)  A 2-hour charge for each the first and second visits to repair.  A fulfillment and shipping order from 1,500 miles away.  Another 2-hour visit to decide we need a board and sensors after ‘not cold’ condition is found.  A fulfillment order for parts.  A 3-hour visit to install them and discover the wrong board was shipped due to an error in the on-line schematic.  Another fulfillment.  Another 2-hour repair.  Another 3-hour visit to decide a compressor is needed.  Another fulfillment.  A 12-hour visit (2 techs with their trucks for 6 hours) and Eureka, they had a missing part with them this time.  The cost to remove and deliver a new unit and dispose of the inoperable unit.  And, a formerly lifetime customer and everybody else in the world they can influence who just possibly could decide to change their buying habits.

Let’s see about tallying all that up.  I get 26 hours of tech time.  Guessing with a truck and fully loaded labor and management with a profit margin if 5% costs at least $75 an hour to operate.  Now we have 4 cycles of parts fulfillment – at least ½ of which were wasted.  Let’s guess $200 for the lost parts and another $100 for wasted freight and parts depot costs.  Oh, and the wasted product delivery team with a truck out and back.  Let’s guess $100 each way.  I come up with $2,450.00 in support activity costs, without considering all those contact center calls and store staff time dealing with us.  We paid about $1,200 for the unit in the first place.

I don’t know what the profit margin on a $1200 scratch and dent refrigerator sale is, but at 10% or $120 against $2,500 in costs in our case it means we need 21 perfect deliveries to cover this one failure before any profit is realized.

There must be a better way and economics will eventually dictate a better way.

This begs lots of questions.  First, one must wonder if anyone has taken the time to think about the end-to-end value chain from a total cost and total customer experience standpoint.  I doubt this cycle differs much if it’s a dented versus new and unblemished unit from the factory.

Probable root causes: Because the OEM manufacturer, retailer, scratch and dent store, repairs contractor and parts depots are all independent entities on P&Ls, there are many steps and checks-and-balances that have been put in place that would not necessarily exist in a single-point services approach.  Again, BPO and miss-guided ‘improvement’ efforts from a silo-oriented optimization view are the likely the main culprit.

The contracted repair companies probably love the arrangement if they get paid for each call made.  There is not really any skin off their nose.  It’s the retailer that owns the customer experience.  In fact, the techs privately blamed the retailer for the screwy policies they must follow that are very wasteful.  I am guessing at least 50% of the repair tech hours were wasted due to simple issues with policies.

The OEMs may or may not care that much because who takes it on the chin when there is a bad customer experience?  Yep – the guy who took your hard-earned cash, the retailer.  You rarely have a relationship with the OEM when buying from a storefront.  The retailer in the middle of this has a monster challenge of how to go about being the supply chain and customer experience captain.

Now for the truly bad news

This is not a unique or isolated problem.  These issues are endemic across many industries and are particularly a problem in the higher volume consumer and industrial goods sector where service and repair of machinery and equipment are in play.

And the good news

As a recent recipient of the SCOR-P certification, most other APICS certifications, and being dangerous in Lean Six Sigma, I can say with some authority there are good tools out there to help us get a handle on these kinds of issues.  The SCOR framework provides extremely useful approaches to asking all the right questions and aligning the right metrics and skills for supply chain execution.  Watch for more about SCOR being released by APICS.  Figuring out how to integrate SCOR with Lean Six Sigma / Operational Excellence and other best practices such as APICS skills will be addressed in future issues of Lean Culture.

 

Additional Reading

The Changing Customer Service Paradigm

Big Data and the Customer Loyalty: Use it or lose it

Problem Solving For Operational Excellence

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