High Touch versus Low Costs

In a story from the weekend NY Times - full article here - they explore the mini-history of call centres and automated phone trees and the rage that it is causing for their consumers. Customer aggravation and ways that companies are looking at easing it are an important part of the article. Money quote -

For the first time, American corporations are acknowledging “customer service as something worth paying for rather than just red ink,”

From the consumer side of the fence, people want to talk to real live people and get incredible service - while still paying low and competitive rates for the products / service they receive from the company. These two things do not correlate.


It reminds me of a discount airline that I did some consulting for that was very focused on personal touch with clients and insisted that no IVR be used in their call centres and that each call made to the call centre would be answered by a live person. At the same time however, they were concerned about escalating costs (no kidding) and the scalability of their call centre operations given a recent boom in business. Unfortunately low costs and high personal touch do not go hand in had - in fact they are opposing factors.

While ultimately we did not recommend going with an IVR, we did ask them to think about their brand promise and the expectations that they have set with their customers - expectations that are getting harder and harder to meet. To be truly competitive from a product perspective means keeping their back office costs low, and their customer care costs even lower.

While the company could provide one-on-one high touch customer service and answer every call, their customers would revolt because of the increase in prices. Tough decision. What should they do?