The Prohibitive Cost of Talking to Customers

John Seabrook’s latest New Yorker piece, Hello, Hal, takes a look at interactive-voice-response systems (IVRs), those automated customer-service robots we spend so much time talking to:

“Americans spent 43 billion minutes on the line with an I.V.R. in 2007, and only one caller in ten was satisfied.”

A ninety-percent rate of customer dissatisfaction?! That’s an abyssmal failure, especially if your business is one of those old-fashioned businesses that relies on happy customers. Seabrook reports that the cost to actually put a human on the other end of a customer phone call is $5, on average. What is wrong with a businesses when $5 is too expensive to talk to a customer?

Check out the recent experience of my colleague Pete Spande, who sent an email to Sprint’s new CEO, who offered up his direct email address in a TV commercial (see AdRants):

“In response to frequent complaints about its crappy plans and service areas, the CEO of Sprint appeared in a commercial and committed to do better. He offered viewers an email at which they could file critiques directly. Spande emailed to commend him on the campaign, and got — wait for it! — an automated message. A day or two later, he got an email from some random CSR, inviting him to check out the Sprint/WiMax website.”

Yikes.

  1. # Chris said: June 26th, 2008 at 6:37 pm

    It’s what happens when you put accountants in charge of a business. It’s the cost cutting mantra – “To hell with the customers.”

    As a disgruntled consumer I’m just so peeved that every B2C enterprise has IVR, even SMBs are getting in on the act. There’s nowhere left to churn to.

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