If you’re running a high gross margin business, that totally makes sense. That also leaves an opening for a competitor to come in and treat your high margin as their opportunity, maybe by going cheaper on CS.
In a low gross margin business, I think the days of having excellent and high status customer service are already gone (and may have never been).
To the operator example above, a 5 minute long-distance call in 1980 cost the equivalent of about $7.50 in today’s money. It’s probably not that hard to figure out the conclusion of squeezing those costs and margins out of telecom companies, but I also think we’ve all been made better off for it, except perhaps people whose dream it was to be a telephone operator for 45 years.
In a low gross margin business, I think the days of having excellent and high status customer service are already gone (and may have never been).
To the operator example above, a 5 minute long-distance call in 1980 cost the equivalent of about $7.50 in today’s money. It’s probably not that hard to figure out the conclusion of squeezing those costs and margins out of telecom companies, but I also think we’ve all been made better off for it, except perhaps people whose dream it was to be a telephone operator for 45 years.