Would Your Business Thrive if You Only Served 70% of Your Customers?

A recent article in the Associate Press stated that the IRS is aiming to only serve 7 out of 10 of it’s customers by phone.  So, for the unfortunate 30% of people calling in with questions, they will never receive the help they are looking for.

The IRS states that they have simplified the web site and that it should be easier to navigate and use for most people.  In 2004, the agency had a 84% response goal.  Because they have been overwhelmed by call volume, they increased the usability of the site, but are lowering their service standards in the call centers.

I think this poor planning in the part of the IRS.  I commend them for improving their site, but by lowering their service standards for those calling in, they are perpetuating tax challenges for the public.

For those that are web savvy, they may very well find most of the answers to their questions and necessary instructions on the site.  However, for those that don’t have access to computers and are not well versed in tax issues, a phone call will still be necessary.  So, on that line of thought, those that truly need the help are calling in, but only 70% will get the help they need.

I don’t know about you, but if I can’t get through on the phone, I hang up, then call back.  I would imagine that many others do the same thing.  Now, we are creating a bigger problem – creating an inflated call volume based on the fact that people are repeatedly trying to get through.

I am also willing to bet that many people calling will have already tried getting their questions answered on the website and are turning to the phone call center to get customer service and assistance that is necessary.

The IRS needs to thoroughly examine it’s processes, be proactive wherever possible, and staff accordingly to get the tax payers the help they need and deserve.  It may cost a bit more in the short run, but over the season, the calls will decrease and staffing levels can then decrease accordingly, thus saving they money they are hoping to save by not serving the 30% already discounted.

I find it amazing that we, as tax payers, are having to be told that 30% of us can expect not to receive the customer service we are already paying for.

If we ran our businesses this way, we would expect customer satisfaction rates to drop and our customer loyalty to fall off substantially.

2 Replies to “Would Your Business Thrive if You Only Served 70% of Your Customers?”

  1. Kristina,
    I actually see this from a slightly different angle. I’ve been having conversations recently with several folks like Chris Reaburn and TweetCRM about the benefits of trimming your customer base to improve the experience for your best (and most profitable)customers, while improving the profit margin per customer. If you remember Verizon Wireless got a lot of bad press for ‘firing’ a small segment of their customers. I really have a hard time finding the problem in that. Customers speak with their wallets all the time. Why shouldn’t there be an expectation of quid pro quo? Insurance companies chose to not renew policies of customers as standard practice if their actuarial models forecast that policyholder becoming a higher risk or cost to serve.

    We see evidence all the time of companies that, especially once they go public and are under pressure to grow from Wall Street, grow beyond their capacity to service their customers. Circuit City was one of the most recent. Instead of focusing on growing to the point of inevitable collapse, how about focusing on acquiring a few less customers, opening a few less stores, delivering a superior experience (which research shows consumers will pay a premium for) and enjoying above market profitability.

    I love to reference Wegmans grocery store as a model for this. They are a family owned company and control their growth. As a result, they are consistently in the top 100 companies to work for and tops in customer satisfaction. On the flip side, in that industry, I see Whole Foods going down the expansion path of destruction. They had a great, high profit niche. Now, investors are driving the company to dilute that value proposition in return for more and more stores. They have a place reserved next to Linens n Things in the growth graveyard, if they continue to pursue that strategy.

    1. Very good points, Barry. I completely agree with you. There is a concept of “Top Grading” your staff, and I think this is what you are referring to as well, except it would be “Top Grading” your customers. We do want to serve our best customers with our best service consistently. It becomes difficult to do this sometimes when we are tied up with customers who are not the lifeblood of our company, but seem to occupy more than their share of resources when the return on investment is negligible.

      For the majority of businesses that are dependent upon their current customer satisfaction levels and do actively recruit new customers, I think that all customers should be treated well, no matter what. That being said, the better customers – those that spend the most with us and have engaged in mutually beneficial relationships, do deserve the better treatment, service, and attention.

      In the case of the IRS only striving for a 70% service rate, it seems to be somewhat of a kick in the teeth because we all are already their customers and they do need to serve us. Also, they need to expand the resources for the 30% who won’t be able to get through by phone in order to get people the assistance that they need.

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