Top 3 Grand Customer Services Fail and The Lessons of Their Demise

There is nothing more aggravating for customers than being offered a meager customer service, especially if it is delivered by a renowned brand. Unfortunately, not all businesses comprehend that customer service is lot more important than they think and it definitely plays a vital role in this world of constant rivalry. But still there is a question unreciprocated as to why do customers stand this and do not seek an alternative?

Some of the businesses Americans mostly rely on are mostly inundated with terrible customer service. Whether it’s utilities, cable companies or airlines; these three areas are among the worst escort, as per the latest findings from the American Consumer Satisfaction Index.

Limited rivalry and the actuality of the matter is that, majority of the grave customer interactions took place after the occur after the matter had already escalated, such as service interruptions which lead towards lowering down the industry’s ratings.

By a long way, the largest rating crash was for Northeast Utilities, which left clientele fuming due to long storm power breakdowns. The lower tier also includes Twitter, LinkedIn, and also Facebook, which were only freshly included in the survey.

Let’s take a look at the top three examples of enterprises that exhibited poor customer service, failed to take note of their customers, and thus ended up paying the crucial price.

US Airways

Back in 2005 before America West bought US Airways, the airline sliced down its customer service budget and began outsourcing many of its operations. This led to drastic mismanagement! Numerous complaints failed to be addressed which angered the customers to the point that they decided not to do business with the airline anymore. There is no definitive cost mark-up recorded for the loss US Airways underwent. Eventually, the airline was filed for bankruptcy.

W.T Grant

W. T. Grant or Grants was an American retail chain for mass-merchandise that operated from 1906 until 1976, 70 years of service until they filed for bankruptcy. Founded by William Thomas Grant, the major loophole here was them telling the customers are wrong. The company failed to understand that middle-class US-based citizens were shifting to suburbs and this inflicted a great challenge to the company as they had a bigger percentage of their stores located in downtown locations.

W.T Grant faced this challenge with poor marketing gimmicks such as free store credit offers to anyone that breathed. Unfortunately, their plan backfired, badly. Grant’s customer base was not looking for free merchandise; what they wanted was to be able to shop in the comfort of their suburban vicinity. Grants fell unsuccessful to adapt according to the needs of the customers and negated the biggest marketing rule of all customer is always right by telling the customers right off that they were wrong. Big mistake. This has been recorded as the second largest bankruptcy in the history of United States.

Blockbuster

It’s one of those firms that failed at failing. Blockbuster, once a powerful video rental chain shut down 50% of its stores and was auctioned off to the Dish Network to be filed for bankruptcy. The most heard reason by the market analyst for Blockbuster’s downfall was their obsolete technology – namely video streaming which they were unable to adapt.

Good heavens, Netflix was in service for six years before even Blockbuster instigated its own video streaming line. So, Blockbuster had ample amounts of time to adapt. Rather, the management hinted they may well duplicate Netflix and crush the social climber. Well, that didn’t work out really well for them. Although they could have neatly managed the disaster to keep their outmoded retail business alive, giving out what little money the firm had made over to the shareowners resulted in another of Blockbuster’s failures.

However, there are other narrative arcs that say Blockbuster charged outrageous amounts for late fees and did not pay heed to what customers actually wanted. It had been obvious for years that Blockbuster’s model was on shaky grounds. Had they had more grasp on respecting customer’s needs, they might well have been able to fight off the threat before it emerged. Even after Blockbuster tried to compete directly with competitors like Netflix, customers had made up their minds they didn’t want to do business with Blockbuster.

Bottom Line

While there’s no one way to make certain that you’re not falling prey to the same kind of thinking, dealing with any potential competitor as a threat is a good starting point. And observing what it is that consumers like about that opponent can be a good point to start from for revamping your own business model to make sure that it doesn’t become outdated.

During staggering economic times customer service and engagement is highly crucial than ever. Smart businesses recognize that while the supply of products or services may plunge, the demand for customer service never dies – and it’s those companies that are bound to do better than their competitors.