When Did Capitalism Kill Customer Service?

Alex Kearns was twenty years old when he decided to take his own life.

Prior to graduating high school, he had decided to open an account with Robinhood, an investing app that claims to democratize investing by allowing people with no experience to invest money in the stock market. Alex had about $5,000 saved from grandparent gifts, and his parents thought it would be a good way to teach him about money with limited exposure. What they didn’t know was Robinhood had also approved Alex to buy and sell options, a risky financial instrument with the potential for big losses.

Last June, Alex noticed Robinhood had frozen his account due to a massive negative balance of $730,000. He’d received an automated email that they needed immediate payment of $170,000 within a few days. Alex searched for a customer support phone number but there was none. He replied to the email, but got a canned response from artificial intelligence. He sent 3 emails to their ‘support address’ online over the next few hours. All they did was have a computer assign him a case number. There was no one there to respond.

“He thought he blew up his life. He thought he’d screwed up beyond repair,” shared Alex’s dad, Dan Kearns. Later the next day, Alex took his own life. The family is filing a wrongful death lawsuit against Robinhood.

Is this an extreme example of poor customer service? Maybe. But how many of us relate to the frustration of dealing with a company we pay regularly for services? We need help, customer service, technical support, a simple question, or god forbid need to cancel the service, and discover the company we paid hundreds or even thousands to over the years is nowhere to be found when we need them.

When Did the Phone Company Stop Using the Phone?

I’ve been a DirecTV customer since their early beginnings as a revolutionary content provider in the 1990s. Many may not remember but they launched a satellite into orbit and beamed television content into space and down to every customer’s house for a few hundred dollars up front for the small dish, then about $80 per month for programming. The picture quality at the time was outstanding, but their customer service was even better – as good as any company I have ever dealt with. They had real, live people in the U.S. answering their customer support line (1-800-DIRECTV) 24/7, typically at their company HQ in Colorado. Even as they built out their website and you could conduct business online, they still manned the phones for billing questions, technical support and subscription / lineup changes.

That is until 2015, when AT&T acquired DirecTV. That’s when AT&T, under the disguise of ‘broadening service’ and ‘improving the customer experience’ rolled DirecTV into their often-glitchy website, and removed DirecTV’s customer service team. They replaced it with AT&T’s global, foreign network of inexperienced call-takers trying to do way too much with little training. Typically, you only get to talk to someone after a 14-step automated process asks you to enter information using a touchtone keypad, ultimately trying to just wear you down. Then wait 30-45 minutes until maybe you get a human who is difficult to understand, and then repeats the same questions the machine asked at the beginning of the call.

Don’t tell me you are unfamiliar with this experience.

AT&T also was really good at not keeping my accounts straight – I had Wi-Fi, cell phone, an email account and now DirecTV, all accessed through the same web portal. The level of difficulty to simply pull up my correct account was staggering, often just crashing their site. Six years into the acquisition, AT&T still hasn’t figured it out. And now, the rumor is they are going to unload it. Shocking… and after it seemed to be going so well! I’m no longer a DirecTV customer and am looking to unload my AT&T ties wherever possible, but it is tough when they are the only option or the best of a couple bad choices.

Lack of Customer Service is a ‘Feature’ not a ‘Bug’

The fact is, however, AT&T’s approach to customer service is the norm way too often now, not the exception. Big companies across the spectrum have taken this approach. They push customers to the web, where we are forced to deal with a chatbot, endlessly search Google for a solution, or just give up. They hide their phone number or don’t even provide one anywhere on their website. And if they do, don’t properly staff it to handle the call volume. One of my favorite ironies is when I’ve been on hold for wi-fi technical support because my internet service is down, and the recorded hold message gives me a website address to visit where I can solve my problem. Really?! Why do you think I’m calling?! I’ve never wanted to reach through the phone and pour a beer on a machine more.

This is not a glitch, it is intentional. It is their business model. Make it easy to buy – frictionless selling they call it. But make it really, really hard to get support. Just put a few resources online and let the customer figure it out, because support is difficult and expensive. Who needs return customers anyway? Most of them are operating as monopolies in new industries with limited or no competition. Why would they try to build loyalty? What are you going to do… leave? You don’t have another option.

Try Cancelling a Subscription

The other part of removing friction from the buying process is to ask the customer for just 1-click to buy. But have you ever tried to cancel a subscription to some service that you’ve had for a while? There certainly isn’t just ‘1-click’ to cancel. Many times it is not even visible on their website navigation. You have to enter ‘cancel’ into their search bar, or worse, you have to go offsite and enter the request into a search engine and then follow those instructions.

The business model with far too many technology service companies is make it easy to buy with low barriers to entry and make it difficult to cancel where the customer has to put too much effort into the process or doesn’t want to spend the time to recoup $5-10 per month. Multiply that over 12 months and thousands of customers, and that adds up to millions of dollars of extra revenue, all for making it hard to end a relationship.

Is wearing a customer down really part of their business strategy? You bet it is.

There Has To Be a Better Way

I don’t profess to have a quick and easy fix to this trend. Big companies with borderline monopolistic market power have enormous incentive to maximize profit. It is difficult to go against data that suggests making it hard for a customer to cancel your service could yield millions in extra profits.

But at some point, Boards of Directors, C-suite executives, and shareholders have to speak up. They have to hold decision makers accountable to ethical standards on how to treat the lifeblood of any company’s future – its customers.

And we as customers have to be more discerning about beginning a service or new business relationship, and more determined to hold them accountable. We have to use the power of our wallet and punish companies who support this lack of customer service strategy and make it a staple of their revenue model by leaving them.

In some ways, this is not a new problem with capitalism. Those with power wield it, and those with little or none are forced to deal with it. Social media can be one tool customers use to punish big companies’ poor customer service. I’ve wielded it to force a response from healthcare companies and airlines with some success when I felt I was not getting heard. If they monitor their Twitter account, I’ve gotten a response with a separate number to call.

One of the more famous acts of customer revolt over principle was Dave Carroll, the singer and songwriter whose guitar was damaged by United Airlines but had great trouble getting restitution. Instead of giving up, he used his creativity and skill and penned the now infamous ‘United Breaks Guitars’ song. His act cost United much more than the $3,500 replacement cost of Dave’s Taylor guitar. Estimates have the public relations disaster costing United $180 million in lost value.

Not all of us can go to those lengths to demand better customer service from big companies. But we have to collectively do more than we are doing now.

If for no other reason than to prevent another incident like Alex Kearns.

Menu