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No Customer Service= No Business, UNH Management Professor Says

Release Date:
11/14/2011 12:00 AM
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Nov. 14, 2011

WEST HAVEN, CONN.  -- In the late 19th century, Marshall Field, owner of the iconic Chicago department store, coined the phrase “the customer is always right.”

Field never could have anticipated just how right the customer would be in 2011, however.  Changes in the business climate resulting from the 9/11 attacks, a long economic recession and intense global competition mean that today’s customers demand companies function at near-perfection levels just to survive, according to Tony Carter, professor of management at the University of New Haven.

“They have to bring their “A” game out every day,” he says. “There is very little margin for error.”

Companies that ignore or fail to stay in touch with their customers quickly find their futures compromised, he wrote in a chapter in the recently released book “The Economic Geography of Globalization.”

“Customers today are more demanding, sophisticated, educated and comfortable speaking to the company as an equal. The rapidly changing business conditions make it more difficult and challenging to keep customers,” he says. “It is necessary to consult customers for preferences and to build familiarity and knowledge.  Companies have to build a relationship with their customers and manage them carefully, customizing service whenever possible.”

Companies that don’t, he adds, lose their customer base and eventually go out of business.  Digital Equipment Corporation, for example, had $10 billion in sales but $100 million in losses when it failed to pay attention to consumer demand for notebook computers, Carter says. It no longer exists.

On the other hand, Lubrizol, a Fortune 500 specialty chemical manufacturer located in Wickliffe, Ohio, was recently purchased by Berkshire Hathaway Corp because of its success.  Carter, who has done consulting for the company, says that is because Lubrizol keeps in close touch with customers.  “They are the opposite of streamlined. They doubled the number of employees so they could really listen to what their customers want,” he says.

Listening can be difficult, however, he says, because what you hear is not always what you want to hear.  “Listening is risky – the executives have to be secure enough to take it on.”

Another challenge companies face is keeping research and development robust even if research and development positions have been eliminated. “Now it is up to the executives to do this,” Carter says. “That’s something Apple has done all along.”

Organizations want certainty, Carter notes, but in the current climate they are not going to get it.  “Innovation is never a sure bet,” says Carter.  “Every executive needs to ask himself: ‘Am I doing enough to improve and increase value?’”

And if they are not, customers will let them know. 

“Ninety-one percent of unhappy customers will never buy again from a company that dissatisfied them and they will communicate their displeasure to other people.” Carter says.

The University of New Haven is a private, top-tier comprehensive institution recognized as a national leader in experiential education. Founded in 1920 on the campus of Yale University in cooperation with Northeastern University, UNH moved to its current West Haven campus in 1960. The University provides its students with a unique combination of a solid liberal arts education and real-world, hands-on career and research opportunities. UNH enrolls approximately 6,400, including nearly 1,800 graduate students and more than 4,600 undergraduates – the majority of whom reside in University housing. Through its College of Arts and Sciences, College of Business, Henry C. Lee College of Criminal Justice and Forensic Sciences, Tagliatela College of Engineering, and University College, UNH offers 75 undergraduate and graduate degree programs. UNH students have access to more than 50 study abroad programs worldwide and its student-athletes compete in 17 varsity sports in the NCAA Division II’s highly competitive Northeast-10 Athletic Conference.