The service industry is at an impasse.
For years the telecommunication and airline industries have been promoting service as one of their key benefits and a cornerstone of their business.
However as a result of the GFC, costs have been squeezed and the bottom line has to deliver returns to the shareholders.
CEOs are rewarded when they deliver a profit and the brand image is of secondary importance.
Airlines are continually cancelling flights when they don’t reach a particular percentage of capacity.
Making the claim, ”More flights more often.” seems rather lame.
Then take the telcos and Vodafone in particular.
They have spent years and millions of dollars promising service and raising the expectation of their customers.
Many consumers, sick of the monopoly and heavy handedness of Telstra, moved to the more proactive and approachable Vodafone.
Now it’s all gone horribly wrong.
With an increasing lack of service from the network and the company, their customers started to complain.
There are so many disgruntled consumers that a class action has been mounted against Vodafone. Currently 20,000 angry people have signed up.
Their initial response to the barrage of complains was to shut down their email server.
Now they are in damage control.
The Vodafone CEO, Nigel Dews, has been forced to publish a public apology, listing the steps they are now taking to rectify their shortfalls.
Time will tell if they do lift their game and invest more than just words in delivering a better service to their customers.
If you do wander past a Vodafone shop at the moment they are eerily empty. So the one area they were trying to protect, by reducing service, their profit, now seems very much at risk.
It’s been years since anyone has debated the value of a brand as being as important an asset as production lines or bricks and mortar.
This fact seems to have been lost on short-sited shareholders and weak, complicit, CEOs.