Service as a Commodity

An excellent post by Simon Caulkin called Not Customers but Commodities got my attention.  It illustrates how customers are being treated like commodities.  Technology, standardization or a combination of the two have left us feeling . . . shorted in the service we receive.

Efficiency has replaced sanity and customers feel it.  Service organizations (public and private) have looked to their own bottom-line to “hit the numbers.”  Meanwhile service to customers has deteriorated either rapidly or slowly, but does entropy.

Managers without fortitude or knowledge claim they are trying to balance profit and good service.  The result is disastrous and preposterous.  The false assumption is that there is a trade-off between good service and costs.  The “zero-sum game” as I call it.

The truth is there isn’t a trade-off.

Good service delivered the way a customer wants it always costs less.  Less handling and more revenue.  Oh, and less marketing to service customers that don’t need to be convinced of your good service – because you are delivering it.

Absorbing variety in a technology, best practice, rules, scripted and standardized world is very difficult and the customers are left out of the equation.  Like a product that is cheap but only lasts a few days, service is done in the cheapest manner at the expense of the customer.

The examples are many, like a contact center geared to answer calls that add revenue but put customers through the gauntlet when they have a problem.  In an attempt to avoid costs, service organizations add costs.  IVRs to navigate and back offices to negotiate . . . in a word it sucks.

The good news – for now- is that all your competition stinks too.  Customers are mired in mediocrity or less and yearn for someone to actually stand out.

However, given the service systems companies have designed business improvement seems so far away. Managing costs over rules good service.  If only service companies and governments understood that serving customers ineffectively is at the root of the causes of costs.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for  Download free from “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at LinkedIn at

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