The Companies You Hate

Increasing Irritation

Even this sample provides solid evidence to back up my two initial conclusions.

The level of irritation is high enough that consumers are walking away from transactions. I doubt that all of this is measurable by the chief financial officers at these companies, but I'll bet some of it is. And I'll bet that the best-run companies know that they've pushed customers about as far as they can.

My unscientific sample also says that companies that want to fix the problem have two choices.

First, they can rehire the employees who kept that extra checkout lane open, train sales staff about their products, repatriate some of the customer service jobs that have gone offshore, and the like. In other words, companies can spend more on people.

I don't think this is very likely. Many companies have spent years laying off these workers, so rehiring them would amount to admitting that the cost-cutting touted in last year's annual report hasn't worked as advertised. I'll be happy to be wrong on this one because it would mean a significant uptick in the creation of new jobs. The way I read the data, though, company managers aren't rushing out to hire new workers.

The second alternative is more -- and better -- technology. A high percentage of the complaints I received boil down to technology failures. That's one part of the story behind the aggravation with phone trees, billing, lost orders, incomplete installations and time wasted waiting in lines. If the technology only worked as well as it was supposed to, you wouldn't be standing in line with 14 other fuming customers while the checkout clerk struggles with voiding an order.

Just getting the technology to work would be a huge savings for most companies. Unfortunately, to actually get the cost savings promised by the last generation of technology, the unwritten laws of the technology say you have to invest in the next generation.

Failing to Live Up to Expectations

Given the expense and failure of many customer service technologies to live up to their promises, you'd expect CEOs to drag their feet on this new investment. And that foot-dragging as a result of past disappointments is one of the reasons technology spending has lagged in this recovery.

But the time available for foot-dragging is running out. The cost-cutting pressure ahead can be met only by better technology if companies aren't gong to hire more workers. And some companies have managed to get this stuff to work right, raising the bar for others.

You know from your experiences that there's a huge gap between the best customer-service technology and the average technology. When I rent a car from Hertz, the company has all of my preferences in its computer so I don't have to spend time telling them I want a non-smoking car. Again.

I expect from my dealings with Amazon.com (AMZN Quote) and Barnes & Noble (BKS Quote) that I'll be able to track online the delivery of my order from warehouse to my house. And that makes me irritated with The Container Store when I have to actually pick up the phone and call because its Web site doesn't allow tracking.

The two lessons that emerge from reading these complaints -- that this do-it-yourself cost-cutting strategy is nearing its limits and companies are going to have to start spending more on workers (unlikely) or technology (likely) -- have big implications for my stock-picking strategy as I try to look beyond the current market gloom.