No service, with a smile

MANAGEMENTSPEAK: Thanks for clarifying that point.

Free IT resource Hear how top CIOs turn change into a competitive advantage. Sponsored by HP Free IT resource Try Sun servers, workstations and storage products free for 60-days. Sponsored by Sun Microsystems

TRANSLATION: Now we're confused at a higher level.

-- Thanks to this week's anonymous IS Survivalist for clarifying what we're confused about.

ONE OF THE MORE mystifying value propositions in recent memory was Wilford Brimley's tag line in his series of Quaker Oats commercials. "It's the right thing to do," he explained. It was the first, and with any luck the last, time I've heard anyone suggest that my breakfast menu might have moral as well as nutritional content.

I've heard business professionals discuss customer service in moral terms as well, but providing quality customer support has no more to do with morality than oatmeal does. It's a good thing, too, because "it's the right thing to do" is a weak persuader in the business world. Businesses aren't, after all, moral entities, and in evaluating the ethical content of business action, the only valid tests are whether 1) the business harmed anyone financially or physically; and 2) the business's customers can take their business elsewhere.

In the absence of competition, regulating the quality of customer service is every bit as logical as regulating price and quality. For monopolies, regulation is a surrogate for the market forces that constrain other enterprises.

When businesses compete, though, customer service acts as a competitive differentiator. So when, for example, eBay chooses to provide no means for customers to contact live human beings by telephone, the company isn't acting immorally, no matter how much an outraged customer might want to talk to someone. eBay has made a calculated business decision. Some of its customers will leave; others will put up with the lack of telephone-based service. Some of the customer loss might translate to revenue loss, but tracking that loss is an uncertain exercise.

The cost of building and staffing a call center, in contrast, is completely trackable and falls directly to the bottom line. For eBay it presumably exceeds the benefits to be obtained from additional customer retention.

The point of this analysis isn't that eBay's service stinks. It's that excellent customer service is just a business strategy. eBay is a convenient example of a company in which size, growth, and profitability demonstrate that nonservice-based strategies can succeed. On the other hand, Lands' End, which has achieved its size and profitability by providing superb service through every imaginable communications medium, demonstrates the viability of a high-service-based strategy. Paradoxical? Not at all. Confusing? No, not really.

It's simply another example of the single most important rule of business: Never always; rarely never. There are few absolute rules.

Everything depends on context.