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Does Better Service Cost More?

Customer Service CentreImage by xcode via Flickr

There was a recent article in SmartMoney magazine that chronicled the growing trend of businesses that charge customers for higher levels of customer service. While the trend is growing, it is certainly not new. But it raises some great questions, and so let me start the conversation.

Historically, the cost of providing higher levels of service was passed on to consumers in the price of the good or service purchased. Shop at Wal-Mart and expect a Wal-Mart level of service. Shop at Nordstrom's and you expect a better service experience. In other words, you get what you pay for.

Today, businesses are beginning to acknowledge that there is a cost associated with providing good service. Instead of passing the cost along in the prices of the goods or services, they are asking customers to pay for it separately. The airlines are a great example. The ticket price gets you on the back of the plane from the back of the line. Want to check luggage? Pay for it. Want a snack? Pay for it. Want a little leg room? Pay for it. Want us to care at all? Pay for it.

The technology sector is another industry who are big into the practice. We all fear picking up the phone to call tech support. Are we going to get lost in the fifth level of IVR hell? Will we be banished to speak to an unintelligible lemming on the other side of the world? Now companies are beginning to offer higher levels of service and support... for a price.

Of course, some businesses pride themselves on finding one of business' Holy Grails: keeping prices low and providing superior levels of service. Southwest Airlines and Zappos are two of the faddish examples. While there is certainly a cost associated with training their employees and taking care of customers, these two companies have found a way of creating a culture of service while holding their price points reasonable.

There is a common myth in the call center industry that providing better service takes more time. From both experience and data, I know that to be false. So is it equally mythological that providing a superior service experience costs more money? Should the customer have to pay?

What do you think?

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