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Jack and The Bean Counter – Losing Customers by Saving Money

Dull, dull, dull. An article about business efficiency I’m afraid. Well, it might be a dull subject, but it’s one that could be losing you a lot of money – and not for the reasons you may think.

See, there’s a very nasty trend (in my opinion anyway) that is affecting each and every one of us in our daily lives, and we’re all getting caught in it.

Part of the work I do offline, is to consult on the approach and delivery of IT projects and systems. It’s been over 25 years years I started in the computing business, so I’ve been up to my neck in it since the first IBM PC’s hit the market.

I was lucky enough to be both part of the exitement, drive, and incredible change that technology has brought us, as well as being an observer of its’ effects on the ways that businesses are run as well.

I think it’s fair to say that IT is now a mature market, and most changes now are step changes not radical and innovative as they once were.

The biggest problem with IT from a business perspective, is that it has always been seen as a cost. Going back a while, most organisations adopted new technologies because they had to, not because they wanted to. It was the ‘keeping up with the neighbors’ attitude that sustained huge growth for quite some time.

This has meant that the attitude towards I.T. on the whole, hasn’t changed much. In many ways it’s been seen as a necessary evil and not a force for good or improvement. It also means that anything that can be done to cut down the percieved (and real) costs of computing are seen a good thing, and should be pursued vigorously. After all, how do computers actually add profit to the bottom line?

Here’s the thing.

If you can’t cut the costs of IT any further than you already have, where do you look next? Well, with the advent of outsourcing, the cost of investing in more technology was offset by the massive savings in contracting out huge chunks of work to chaper labour in other countries.

The approach has been (and I love this phrase) to “industrialise the processes”. Effectively this means dumbing down the work by using more technology, so less skilled workers can do the same work as skilled workers used to do but cost less, therefore freeing up the more skilled workers to do the more skilled work.

Sounds great doens’t it. More workers at lower cost, with more investment in more technology and still saving money?

The problem is, Apart from the fact that it doesn’t really work like that, businesses both small and large completely forget or ignore the impact of this attitude on their customers.

For example-

1. How many of us like dealing with automated call systems. regularly spending from 5-10 minutes getting through the phone menus, only to be told by a pre recorded voice that “your custom is important to us, but all lines are busy. Plese try later”

2. You take a broken electonic gadget back to a chain store where you bought it, only to be told by the very helpful sales person that “I’m afraid I can’t deal with your problem, you’ll have to speak to customer services about that”. And where is the customer service desk? there isn’t one. You have to contact a call centre that’s based thousands miles away, and go through an insane discussion about buyers rights, smallprint, and threats of legal action, before somebody eventually agrees that the best course of action is to replace the item. Why couldn’t the store manager make that decision?

These to me are just 2 examples of where the bean counters have been allowed to overrule common sense. Of course businesses should run efficiently, but at the end of the day, we don’t do business with the accountants, we do business with people.

By making after sales as difficult (ie as cheap) as possible, many companies are losing customers faster than they are gaining them. The short term attitude of cutting costs by dumbing down the process and taking responsibilities away from the people we deal with day to day, simply alienates customers and loses money. I know because I’ve seen it. In the short term (the first couple of years maybe), significant cost savings can be shown. But, after this time, customer patterns seem to change. Support costs start to incresase. employee turnover rises. customer numbers and satisfaction goes down and many are scratching their heads wondering why.

There really does need to be a rethink on the approach of dealing with technology, costs and service and it’s impact on all parts of any business. There’s a tangible distancing between businesses and their customers. Too much time spent behind computer screens and not enough time actually talking to the people that matter.

Yes we want good value goods and services, but you know what? I think most people would be happy to pay a little more to get a proper service to start with. What do you think?