Q&A with St.George Bank Limited - Customer Service Institute of ...

A little considered factor in justifying the cost and effort of
implementing a service improvement program is the fact that
there are many cases where bad service is more expensive to
deliver than good.
As outlined above, word of mouth and
reputation risk should not be underestimated
as the following example of how the cost of a
very simple bad customer experience can be
huge:
One lost book, one disgruntled customer and a
potential million dollar legal fee for Amazon - it’s
the latest in a series of morality tales showing
how companies can be hit where it hurts most
due to bad customer experience.
The tale begins in October 2005, when Peter
Calveley from New Zealand ordered a book
from Amazon, which never turned up. One
month later, Peter decided to let loose the
wrath of Utu upon the mighty Amazon - Utu
is a traditional Maori ‘obligation to undertake
payment upon others for a wrongdoing’. And
his chosen form of payment was to inform
the US Patent Office that Amazon’s famous
patent for 1-click payment was in fact covering
essentially the same idea as a patent filed 18
months earlier.
As if to test Peter’s resolve, the US Patent Office
replied with a request for $2,520 - the cost of
a full patent re-examination. Undeterred, he
posted a request for donations, added a Paypal
button to his blog site and two months later the
fee was in the post.
Fast forward to May 2006 and the request
for re-examination is granted by the Patent
Office. According to Wikipedia a typical patent
infringement case in the US costs $1-3M in legal
fees - not sure if this counts as an ‘infringement’
case but one thing for sure, it’s going to cost
them a lot more than a replacement book and
an apologetic phone call.
The reputation risk makes the problem worse,
once something’s been written about you in
the press and online, it’s very difficult to get
it removed. This means that any prospective
customer who decides to do a search on your
business name could come across it.
A little considered factor in justifying the cost and
effort of implementing a service improvement
program is the fact that there are many cases
where bad service is more expensive to deliver
than good.
A lesson about the price of bad service
comes from the Secretary of Transportation in
Vermont:
‘Reporting to me was a smart Commissioner of
Motor Vehicles named Bill Conway. When we
were putting together our budget, I was pushing
Bill to cut his expenses. “Tell me what we can
save,” I said, “if we don’t turn around license
renewals almost instantly.”
“It’ll cost us more to do that,” Bill said.
“You’re just trying to protect your budget,” said
I. “How can that possibly be It costs you more
to process more slowly”
CUSTOMER SERVICE EXECELLENCE
THE MONTHLY MAGAZINE OF THE CUSTOMER SERVICE INSTITUTE OF AUSTRALIA
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