The Customer Service Survey
VocaLabs' weblog providing news and commentary on the challenges of providing good customer service.
Consolidation
Friday - May 23, 2008 02:30 PM in
One of the most frustrating things, from a consumer perspective, is that even when you make a point of choosing a company based on the customer service, after a few years they get acquired and the service level gets flushed down into the sewer.
An editorial published in the Minneapolis Star Tribune last weekend offers one consumer's frustration on discovering that her small, friendly life insurance company has been bought by a coldly impersonal monolith.
This problem seems to be particularly acute in financial services, and many years ago a friend of mine who was an analyst tracking the banking industry told me this was not accidental:
"The strategy of these big banks," he said, "is to build their deposit base by finding local and regional banks with loyal customers and gobbling them up. They know that most people would rather get a root canal than change their checking and savings account, so they can slash service and raise fees for a long time before they start to lose a lot of customers. Meanwhile the big bank is making money hand over fist from all these customers who have warm memories of the old neighborhood bank. So then what happens is the founders and executives of the little bank quit after a year or two, and go out and start a new local bank with great service."
In the end, it's complacent consumers who enable this cycle by being reluctant to change banks when service deteriorates.
....as for VocaLabs, we're in the middle of changing our corporate checking account because we've become dissatisfied with the cost and service levels at our old bank. It's a nuisance, but well worth it.
Posted by Peter Leppik
This problem seems to be particularly acute in financial services, and many years ago a friend of mine who was an analyst tracking the banking industry told me this was not accidental:
"The strategy of these big banks," he said, "is to build their deposit base by finding local and regional banks with loyal customers and gobbling them up. They know that most people would rather get a root canal than change their checking and savings account, so they can slash service and raise fees for a long time before they start to lose a lot of customers. Meanwhile the big bank is making money hand over fist from all these customers who have warm memories of the old neighborhood bank. So then what happens is the founders and executives of the little bank quit after a year or two, and go out and start a new local bank with great service."
In the end, it's complacent consumers who enable this cycle by being reluctant to change banks when service deteriorates.
....as for VocaLabs, we're in the middle of changing our corporate checking account because we've become dissatisfied with the cost and service levels at our old bank. It's a nuisance, but well worth it.
Posted by Peter Leppik
Posted at 02:30 PM by | | | |