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The consequences of poor CX

Updated: May 13

We live in an imperfect world. People screw up all the time. Well, hopefully not all the time but you get our meaning. In fact the economist, Albert Hirschman said it better than us in his book Exit, Voice, And Loyalty (1970). “Under any economic, social or political system, individuals, business firms, and organisations in general are subject to lapses from efficient, rational, law-abiding, virtuous or otherwise functional behaviour”. He is telling us people screw up, if not all the time at least from time to time.

In the business of customer experience this matters. When things go wrong how do we show our displeasure? Do we complain? Do we walk? Do we suffer in silence?

In the finely balanced world of economics it is assumed that people vote with their feet if they suffer poor service or a bad product. With some products this is easy. It is no problem choosing another brand of toothpaste. No problem choosing another brand of car. However, switching isn’t always easy. If we are disgruntled with Avanti Trains that takes us between Manchester and London we have the option of driving or flying. We could write letters of complaint to the chief executive of Avanti. Most of us don’t do any of these things – we continue to use the service, maybe grumbling to fellow passengers or simply taking it on the chin.

In theory a disgruntled customer buying a business product or service could find another supplier. To do so may mean the hassle of ensuring that a new supplier is found, vetted and approved. A cynical buyer may also believe that the new supplier could be as fallible if not worse than the incumbent and it is better to stay with the devil you know. So, most dissatisfied business customers do nothing. And most suppliers know this and have little incentive to invest time, effort in improving their service.

Some years ago we presented customer satisfaction results to a typical B2B company. They sold polymers to around 200 customers spread globally. Our presentation was to the Board and reported low customer satisfaction scores and complaints of arrogance and poor customer service. The CEO bawled us out: “If our customer service is that bad, how come we have had the best financial performance ever!”

You can guess the sequel to this story. Within two years the company (part of a group) was losing money, was put up for sale, and the CEO was sent down the road. Customers can and will forgive the odd lapse in service. However, ultimately economists are right, if the customer experience is consistently poor, customers will make the most powerful protest of all and walk. In the long run we have to get the customer experience right.



Thanks for an excellent commentary on why we suffering consumers so often put up with poor service rather than complain or really try to change the service delivery. It's not only in cases of monopolies, as the rail service you mention, but many other situations as well, such as banks, insurance companies, and phone and internet providers. While switching in these cases is certainly possible, it is usually a pain, and as you say, can you be sure the alternatives will really be better?

The "happy ending" in which a company and/or management gets their just deserts is usually a long time in coming, if ever, and usually the CEO walks off with more than a few million in compensation…

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