Customer service - Journal of Omnifarious
Aug. 8th, 2005
04:04 pm - Customer service
I have a theory about customer service...
Industrial processes benefit greatly from economy of scale. Producing 10 megawatt hours of electricity is not twice as expensive as producing 5 megawatt hours. Producing 100000 widgets is not twice as expensive as producing 50000.
I believe that customer service does not have this property. I believe that for a particular organization providing an equal level of customer service for 1000000 people is more than twice as expensive as providing it for 500000 people. I believe this is true because there are essentially no economies of scale, and many extra levels of management for all the extra people you have to hire.
This means that large organizations will provide inherently worse customer service for an equally priced product as a small organization. So, for products where customer service is a crucially important thing (such as, say, providing Internet service) that there is an optimum size for the organization doing the providing, and that if it gets larger, it provides a significantly worse, or significantly more expensive experience for the customer.
I've been thinking about this because I've been thinking about why all big telecommunications companies are so incredibly awful to deal with while regional ISPs tend to be at least mediocre.
BTW, the FCC has recently made a couple of rulings stating that for the purposes of data (ie Internet) lines, the big telcos do not have to lease their physical infrastructure on an equal basis to all comers. This effectively means the end of ISPs capable of providing any kind of broadband connectivity, and IMHO will make decent quality broadband impossible to find. I think it's the worst ruling the FCC has yet made, and that it will be even worse for the industry than the ill-concieved broadcast flag.