Customer Service in the Age of Twitter and Facebook

I just got off the phone with 1-800-Flowers.com. I had tried to get flowers sent to the hospital yesterday, but they failed to deliver them, so I canceled the order. I called back today to try to re-enter the order with a different address, and finally gave up after speaking to several apathetic employees and getting left on permanent hold. The pivoting issue was a minor one related to a gift code, but their seeming unwillingness to even attempt to solve my problem ultimately caused me to go elsewhere.

I wanted to give them my business. I called back after they messed up (and this was actually my second bad experience with them) and wanted to place the exact order again. After I was left on permahold, I called back one more time, and still would have re-entered the order if for no other reason than I didn’t want to have to find another flower shop and go through the process again. But each time, they failed to even act like they wanted to keep my business, much less encourage me to continue to use them for flower service.

Five years ago, a bad experience like this would have meant that the company lost a few customers at most — maybe me and a few of my friends. But in the age of Facebook and Twitter, where people are microblogging about everything, a few bad experiences can quickly find an enormous audience. All it takes is a reader to see one or two tweets relating a hiccup with a company for that reader to avoid the company in the future. The margin of error for bad customer service is getting far smaller, since it takes far fewer missteps to destroy a reputation than it used to.

Customer service has always been important, but now days, its make-or-break for a company. When I Google for ‘flowers’, 11 sponsored links show up. The services themselves all basically do the same thing — the call one of a few local florists and have them deliver an arrangement purchased online. Since I imagine conversion for keyword clicks for ‘flowers’ on Google are pretty high, I bet that they pay $5 or more per click for traffic through search engine ads. Given that the cost of acquiring a customer is very high, a company in this type of business must do everything it can to make sure that it keeps the customers it has, since part of the rationale behind a high initial acquisition cost is that customers on average will do business repeatedly. But if a company doesn’t invest the [comparatively far smaller] money in customer service needed to keep existing customers, they will find that they can no longer afford to pay the huge acquisition costs because they simply aren’t capturing enough profit per customer over the entire lifecycle to justify the expense. Since its much easier to keep customers you already have, the competitors that can retain customers will be the ones that win out, hands down. And as the world gets more connected, these companies will have an even easier time rising to the top.

Update: I’m not all pessimism — I just had a great customer service experience with Fidelity. Read about it.