The risk of the poor customer experience


It has been an interesting few weeks for me as I progress down a path of changing service providers for my internet.  The key reason for my change was price.  As a side point, for anyone thinking of moving service providers for anything, price should only be one factor, and when you decide it is the primary factor, be careful on what you are sacrificing.

Back, to the key reason for this post.  As someone in risk management, we consider the elements of a business or a project to determine what are events or issues that could cause a loss to the business.  Over the last few weeks I have seen this exact same situation play out with the customer experience.

The customer experience is about the different stages of the customer lifecycle.  The first stage being sales to a new customer, the next is servicing the completion of that customer to fulfillment, then we have dealing with the customer through the term, to the final stage of customer renegotiation or termination.

So, with that in mind, lets discuss what I see are the risks in this experience based on my recent change of internet providers.

The first stage contains primarily risks over regulation and contractual compliance,  The regulatory risks range from misleading potential customers, not informing customers of the appropriate items from a contractual perspective, performing processes incorrectly resulting in customer error and not complying with key legislation.  From a business perspective it is all about managing these risks whilst providing a great customer experience.  My recent experience in this space with my new provider was quite exceptional.  A great phone experience with good customer follow up through SMS alerts.  However, the process execution has failed me.  As we stand today I have migrated to my new provider but I now have no phone service or internet service (this posting is being performed through tethering to my iPhone).

That then leads me to the next stage – servicing the customer to fulfillment.  The biggest risk here is operational risks and these impacting the customer.  Just as they have for me.  In addition, you are also providing the customer with “word-of-mouth” information.  For me, this has been a big fail for my new provider.  The onus is on me to recontact them when things don’t work and when you do you are made to feel that it is your fault (yet, prior to transfer everything was working fine).  It is clear to me that people focus on the sale and then once they have it, you wait over 20 minutes to get through to technical support.  They advise you to call back, because perhaps the problem is still being resolved.  When it has not been resolved, the technician can’t help you, he can just refer to someone else who can only come in a few business days.  These people then just follow a process and even inform you “whilst your ADSL isn’t working you can use a dial-up”…..ummmm, please stop there.  If my phone line isn’t working how can I use a dial-up.  Response, “good point”.  Effectively they don’t solve problems, just defer them to others!  For instance, it is up to me to contact customer service now to get any credit/rebate.  Another 20-30 minute wait time and I will then need to argue my point.  You all catch my drift, but this is a classic example of not addressing your fulfillment risks.

The risks will dealing with the customer through the term are fairly consistent with the above.  Operational risk and compliance risk are clearly the biggest two.  This stage is where it is even harder to get good customer service, with some exceptions, and tends to influence whether in the next stage you keep the customer.  However, by the time most companies get near the end of this stage, they have already helped the customer decide their fate for the last stage.

The last stage is about the customer decision to stay and go, and unfortunately you really cannot manage the risks much at this stage, other than playing with price and/or potentially providing revolutionary new functionality.

Anyway, that is my take on the risks of the customer experience and using my example how perhaps to manage the risks better and more effectively.


Scott North has extensive experience in enterprise risk management, internal audit, operational risk and compliance, risk strategy, scenario planning, technology risk, technology business analysis, systems design, financial accounting, and management accounting. Scott is a Fellow of the Australian Institute of Chartered Accountants with a Masters Degree from the University of Melbourne in Business and Information Technology. Scott is also a Fellow of the University of Melbourne.

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