Will Cost-Cutting Result in Customer Service Decline?

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Customer Engagement
Customer Experience
This recession has hit almost every part of the business world. White collar jobs as well as part-timers are seeing their hours cut or disappear altogether. Even last week's episode of 30 Rock highlighted the desperation of people trying to save their jobs (and straws).

This recession has hit almost every part of the business world. White collar jobs as well as part-timers are seeing their hours cut or disappear altogether. Even last week's episode of 30 Rock highlighted the desperation of people trying to save their jobs (and straws). As companies cut across the board, how will it affect customer service? After all, the way companies can get through this mess is by strengthening their current customer relationships. But does that concept make it past the budget review?Today's issue of 1to1 Weekly looks at how customer service is being affected, and what companies can do to keep it an integral part of their long-term strategies. According to a recent Forrester report, executives are at least talking a good game when it comes to their cost-cutting decisions.

Nearly two thirds of those surveyed said customer service will be even more important during the recession, and 90 percent said customer service will be either critical or very critical in 2009. Twenty-eight percent indicated they would cut spending on customer experience at a lower rate than everything else, and only 12 percent said they would cut that spending at a higher rate.

The vision and the reality are two different things. Personally, I have seen a few more empty counters at retail locations, but overall I haven't seen too much of an impact. But then again, there are the stories like United Airlines, which in February announced that it was closing a call center in India that handled customer complaints and compliments. The company encourages customers to write an email or letter instead. Not a good idea.

What do you think? Has your company cut back on customer service? As a consumer, are you seeing any changes within customer service from the companies you do business with? How prevalent is the notion that good customer service is actually worth the short-term investment now, because it helps build long-term loyalty?

EXPERT OPINION
EXPERT OPINION