Why do companies invest so little in costumer service?
Just listened to the WSJ daily podcast about stubhub, and how they cut investment in operations/customer support WHILE increasing spending in marketing/sales.
Now, putting aside how fucked up this is morally/ethically this is (leaving customer support reps who have no resources available to them to deal with angry customers who are rightfully pissed off and have no one else to direct their anger towards), it doesn’t make sense at all to me from a business perspective.
Stubhub has competitors - vividseats, ticpick, seatgeek. What good is investing in marketing and sales if you’re infuriating your customers who won’t potentially use your service again? The risk of reputational damage seems so high.
Obviously other companies have terrible support (I.e. Airbnb, any phone carrier, airlines, etc.), but some of those companies have near monopolies (it seems some routes only have 1 or 2 airlines that operate between those two, and there are what, only two major phone carriers left??!).
If the government isn’t going to stop corporate consolidation (which would greatly reduce any companies incentive to invest in customer support), can they at least force companies to invest a baseline amount of capital in customer support, or is that an absurd idea?
ALSO, it seems to me that the investment required for decent support is lower than what is required for sales/marketing. Don’t companies just offshore support to India and Pakistan anyway? Wouldn’t hiring additional support staff pale in comparison to what TV time slots cost? (And the return there also seems like it’s lower when everyone already knows who you are). I guess the issue is providing those support staff with resources (I.e salesforce or other crm’s), and maybe that’s the hangup?
I am very interested in getting the thoughts of someone who has any idea in how these decisions are made.