Companies Have Slashed Costs to Show Profits: Technology Is The Next Frontier

Companies Have Slashed Costs to Show Profits: Technology Is The Next Frontier

Since the economic downturn in 2008, corporate America has been managing to squeeze profits by reducing budgets, stretching staff thin and adding technology at every turn to reduce human interactions. Now the wake-up call!  Virtually, everything has been turned into a commodity.

According to Mike Berman, founder of Berman Means Business and a leading turnaround consultant, “differentiation will not come through low cost advantages, but by creating superb customer experiences able to offer unrivaled value to the marketplace. Because cost management has dominated the landscape for several consecutive years, companies have generally lost their intellectual as well as physical way for executing on the customer-oriented growth strategies.”

Companies must consider the impact of loyalty and repeat business when new technology is considered or “reminding” customers of self-service technology that already exists.  ATM’s are a good example.  They were first introduced in the early 1970’s.  Data has shown that customers were comfortable using them to withdraw cash, but not so eager to deposit money or checks.  They wanted the human-to-human interaction to confirm their funds were safe.

Fast forward to today.  Most people know how to use an ATM and do so, but sometimes want to speak and interact with a person, the teller.  If a customer is standing on line at the bank, there is a reason.  My friend went into Chase the other day in Manhattan and told me that managers approached customers waiting on line to walk them to the ATM machine.  In effect, Chase is ‘chasing’ customers away. People were angry, frustrated and probably thinking they would rather take their business elsewhere. There is competition on every block eager for new customers.

I called American Express and the recording announced the wait time will be long and “suggests” to use the web. I push “O” and get an agent immediately. It’s obvious they are trying to reduce costs, not build my loyalty or continue the customer journey.

I love technology; my mobile devices, our really cool Echo (Alexa) from Amazon, but don’t push me to self-serve when I know I need or want to speak to a person. That’s not good customer service. It doesn’t make feel good or warm and fuzzy towards the company.

Once my loyalty to a company has been compromised, it is difficult to repair. Verizon Wireless has a major media campaign to get customers to return. They obviously have lost customers. The other day I received a letter from Liberty Mutual Insurance Company.  It said, “ I used to be a customer, and would I consider coming back?” Too little, too late! It was two years ago. I’m happy with my new insurance provider. I deal with Larry and Kevin at a State Farm office in my neighborhood. Even if they were on the other side of the telephone or computer, I could still feel a connection if the interaction was personalized.

Competition is fierce. Customers yearn for the human touch and want to connect. Customers cannot become a commodity.  If a company wants to grow, become more profitable and survive, technology must enhance the customer relationship, not detract. Departments need staff who know how to create and build relationships.

Human bonding is the differentiator and the glue.  Replacing staff with machines doesn’t make sense if the primary reason is to cut costs.  Customize the customer journey; don’t be penny-wise and pound-foolish.

What do you think?

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