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NEW YORK (TheStreet) -- After decades of complaints, phone-based customer service is still laden with unresolved problems, unnavigable automated phone systems and often unintelligible representatives.

Consumers are getting through to some companies -- such heavy hitters as

American Express

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are strengthening call centers, motivating staff and focusing more on service -- but the dawn of social networking is putting most phone-based progress on hold. According to a social media study conducted earlier this year by public relations firm Burson-Marsteller, 65% of

Fortune 100

companies have active Twitter accounts, with


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among the companies that monitors followers' tweets for complaints and uses their feedback to address glitches. Another 54% have Facebook fan pages, but another Burston-Marsteller report late last year said few companies make full use of social media, leaving much of their interaction with consumers to sorely lacking call centers.

Social networking is putting most call-center customer service progress on hold, even after decades of complaints.

"Companies need significantly better hiring and training in telephone customer service," says Micah Solomon, a customer service keynote speaker and co-author of

Exceptional Service, Exceptional Profit: The Secrets of Building a Five-Star Customer Service Organization.

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"In fact just today I was on the phone with a public utility who 'accidentally' disconnected with me when the issue I was inquiring about grew difficult."

The problems begin before a representative even answers a customer's call. According to this year's Contact Center Satisfaction Index, which combines data from the CFI Group and the University of Michigan's American Consumer Satisfaction Index, consumers give call centers a 76 rating. That's up six points since 2007, but still below the 81 mark ASCI consumers give e-commerce sites, and dragged down by a 61 score for automated voice systems coming before conversation with an actual human being -- if a caller ever reaches that point. When sites such as

exist just to get customers through the Kafka-esque series of doors between them and a company's customer service department, any value that "service" may have offered is lost with the consumer's patience. In an increasingly frugal market, those losses add up quickly.

"I think the recession has been good to consumers because it's forced companies to step up their game," says Shep Hyken, a customer service speaker and author of

The Cult of the Customer: Create an Amazing Customer Experience That Turns Satisfied Customers into Customer Evangelists

who's worked with clients including

Anheuser-Busch InBev

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, American Express,




Morgan Stanley

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. "Getting a customer in is all part of sales and marketing, but getting the customer to come back is the key."

CFI Group estimates that companies are already spending roughly $250 billion on their call centers, with roughly a fifth of that spending going toward outsourced firms. According to the index, one of the quickest ways to boost satisfaction is to yank that outsourced and offshore customer service back in-house. Call center satisfaction rates about 58 out of 100 when a call is handled by an offshore agent, compared with 79 for U.S.-based agents. If that doesn't sound so bad, consider that the IRS' customer satisfaction scores a 55.

Companies are starting to take the hint, as only 9% of consumers surveyed said their recent call was handled by an offshore agent, down from 15% in 2008.

"The decline in offshore call centers shouldn't come as a surprise," CFI Group CEO Sheri Teodoru said in a statement. "Offshore agents not only serve as fodder for late-night comedy sketches, they're a painful reminder that American jobs continue to be outsourced during a period of high unemployment."

All that corporate altruism aside, the homegrown call centers have been working. Netflix, for example, set up a 24-hour call center in Oregon just before completely eliminating e-mail customer service inquiries. The result was a 87 ASCI rating -- leading all online retailers -- and a more than 1.9 million boost in subscribers last quarter over the same period in 2009 and a 31% increase in revenue over last year.

How call center reps handle customers is just as important as where they're speaking from. Hyken client American Express switched operator training recently from a heavily technical affair to a 75% to 80% focus on "soft skills" such as personal interaction. The result was a cache of J.D. Power awards for customer service. Solomon says that training, combined with a hiring process focused on untrainable traits such as genuine warmth, empathy, team orientation and optimism, is the best way to create a staff fit to help a disgruntled customer.

"Because call center work can be so draining, it is important to have a powerful orientation process and a reinforcement program that celebrates customer advocacy on the part of the staff," Solomon says. "Otherwise we get the truly at-best-'meh' results we are seeing nearly across the board in industry today."

American Express' use of the net promoter score championed by Bain & Co.'s Frank Reicheld in his book

The Ultimate Question

also helps the consumer cause. The salaries and bonuses of everyone from Jim Bush, American Express' executive vice president of world service, to the call center staff are based on customers' answers to one question: On a scale of 1 to 10, what's the likelihood you would recommend us to a friend or colleague?

It's a weighty question, as American Express' own Customer Service Barometer says 61% of 1,000 American consumers surveyed think good customer service is more important amid economic instability and are willing to spend an average of 9% more at a retailer that provides it. Those who score a 9 or 10 are considered key promoters and a solid source for good company word-of-mouth. That translates directly to sales and share price, as a 2006 Journal of Marketing study found that the performance of the top 20% of companies in the ACSI outpaced the broader stock market and generated a 40% return. Those companies combined outperformed the


by 93%, doubled the

S&P 500

and nearly tripled the



"In your old-school call center environment they timed the calls and knew what the average call was going to take, and the goal was to get off the phone and get to the next call," Hyken says. "In the new way of doing things, the goal is to get off the phone when that customer feels totally confident that's they've made the right decision to do business with you."

-- Written by Jason Notte in Boston.

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Jason Notte is a reporter for His writing has appeared in The New York Times, The Huffington Post,, Time Out New York, the Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.