Sorry, Customer Service Just Died

You’re right, it is vital! It’s especially important when you want to keep your existing customers. But it is not enough to stand out. What I mean is that customer service is no longer a good competitive strategy.

First, let me explain what I mean with a competitive strategy, in form of an iceberg.

As most people know, only the top of the iceberg is visible. 90 % of the iceberg is under water and invisible at first sight. A competitive strategy is the top of the iceberg. The first thing you see, the part that will distinguish your iceberg from all other icebergs, the reason arctic explorers choose your iceberg and not the others. The part of the iceberg that is under water is what everybody provides. It’s bread and butter.

When businesses promote themselves by saying: “We have Norway’s best customer service”, it is no longer a competitive advantage. It is simply not attractive.

Why?

Because it’s a cliché. Costumers expect all businesses to have good customer service. Customer service has become the part of the iceberg that is now under water. It is something everybody provides, or should provide.

Let me explain it in a historical perspective. Let´s give the lead role to a coffee bean.

Ages ago, the coffee bean was sold in raw form. It was not minced. It was not roasted and it was sold as raw coffee to the end user. During the industrial revolution, several coffee vendors started roasting and mincing their coffee. In the start this was a great competitive advantage compared to those who sold raw coffee.

So, what happened?

Roasted and minced coffee became normal. Everybody sold it and nobody sold raw coffee anymore. Peoples stopped asking for roasted and minced coffee. They just asked for coffee.

In the 80s there were some smart business developers who developed a new competitive strategy for coffee and other products. They invented the competitive strategy: Luxury!

Products that called themselves luxury products had a huge competitive advantage over other standard brands. They could even take a higher price.

What happened? Everything became luxury.

A funny digression is that antilock brakes (ABS) on cars were considered to be a luxury. No one thinks that today.

So what came after luxury? Customer service.

Customer service as a competitive strategy was faster embraced by customers than most businesses. Having good customer service as a competitive strategy is a very costly affair. Therefore, I would argue that most firms waited with this strategy until their customers demanded it.

In the start, it was especially the service industry that focused on this competitive strategy. After the arrival of social media, it became a customer requirement that most industries had good costumer service.

Today, good customer service is the expected. No one becomes ecstatic over good costumer service anymore. We just get extremely annoyed if it is not there.

If you marketing consist of “We have the best customer service”, in my eyes it’s like marketing a car with antilock brakes. Having good customer service is no longer a competitive advantage, just a significant disadvantage if you don’t have it.

So what came after customer service? Customer experience.

Of course good customer service gives good customer experience, but it is only a small part of the experience. Customer experience is the sum of all the experiences you as a costumer have in contact with a brand. Both analogue and digital.

But let us return to coffee bean.

How was coffee served in Scandinavia, when I was younger?

It was brewed coffee, not espresso. It was served black, in mugs and was often two hours old. In cafés, we sat by raspatex tables and on hard wooden chairs in surroundings that resembled hospital corridors, decorated with yucca plants.

After espresso was introduced in Norway in the 90s, coffee preparation became a significant competitive advantage.

Today, it is not enough just to make good espresso coffee. It must be handmade by a barista with perfect foam in Hello Kitty pattern, served with a smile while you get good service. The premises, the cup, the people in the café, are equally important. You should feel appreciated. The sugar and stir sticks should be easy to find. The restrooms should be clean and neat. Information about opening hours, prices and products must be easily found, also digitally.

It’s the whole experience that is important. Not only the coffee, not just the service or the sense of luxury.

Today, it is the whole customer experience that differentiates one iceberg from the other. This is a competitive advantage and a good business strategy.

But what comes after customer experience? I write “after”, because I think customer experience is close to disappearing under the waterline of the iceberg.

Everything that can be digitalized will be digitalized. Not only music, film, television, etc. Also industries like retail, taxi, hotel and so on. If it can be digitalized, it will be.

I think digitalization is the new customer service! In other words, I believe digitalization is a good competitive strategy in todays marked.

Digitalization is the new top of the iceberg.