Branding

Why the supply chain crisis is really a customer service challenge for brands

by Erica Gunn  |  August 4, 2022

  5 min. read

Man wearing cape delivers package to woman with illustration of the supply chain in the background.

Behind every headline about the supply chain crisis, there are disappointed customers. Those customers are most likely listening to music on hold or typing their query to a smiley chatbot in the hope of hearing some news of when their purchase will arrive. They clicked buy now and they wanted it now. That’s the baked-in expectation of the digital age, right? Sometimes the labels that we give to things, like “supply chain crisis,” don’t do justice to the end-to-end impact of disruptive events on a business.

In this case, the disruption started with the global spread of Covid-19 from late 2019 and looks set to continue through 2022. According to Financial Times (paywall), a pair of shoes made in China took as little as 17 days to reach Los Angeles from Shanghai before the pandemic. Today, it can take as long as 52 days. Spread that pattern across anything—from furniture to semiconductors to packaging that’s meant to reach food plants and the ingredients too—and that’s your picture of unpredictable delays at ports and warehouses and shortages of inventory just about everywhere. It’s little surprise then that by the end of last year, just in time for Black Friday and the peak spending period in the run up to the holidays, the United States was experiencing the “longest sustained period of deterioration in customer satisfaction in 25 years.”

There are exceptions to the rule

Before we dive deeper into the prevailing gloom of customer dissatisfaction, it’s not true of every brand. For example, you’ll find that customer satisfaction with subscription TV streaming services like Netflix, Disney+ and Apple TV increased from the start of the pandemic in 2020 through 2021. In a survey by PwC, 83% of streaming subscribers in 2021 were pleased with their options, up from 73% in 2020. Fifty-nine percent expect to pay more for their subscription in 2022. Bingeing on the latest streaming series has just become a central part of life and the household budget. But when it comes to the real world of physical goods, it’s a different story.

Take Apple, for example. While Apple TV is a small but growing part of the company’s phenomenal $3 trillion story, even the world’s biggest company is vulnerable to the shortage in supply of high-end chips that power its devices (paywall). We’re living in a “shortage economy,” according to the American Customer Satisfaction Index, which has been tracking sentiment since 1994. Prices go up when demand exceeds supply. But as the TV streaming services show, when customers are happy, increasing prices are not necessarily a problem. There are other factors at play—and that’s where other brands are winning and losing in the supply chain crisis.

Illustration of customer service rep and customer connecting via chat.

It’s all about the personal touch.

Whether you’re the CEO or the vice president of marketing, you’re also a consumer. What do you do when things go wrong with something you’ve bought or it falls short of your expectations? What’s your instinct? Pick up the phone or hit the company’s customer service email or social media, right? That’s what we all want: an answer—and fast.

According to customer engagement and automation business Verint, “among customers who feel they have waited too long on hold, 1/3 will hang up and never call back.” It’s the end of their relationship with the brand. And that’s just speed. When it comes to quality, we don’t want some generic pacifier. We want something personal. In a sense, there’s a parallel here with what people say they value most about TV streaming services. It’s not just the breadth of content; it’s the personalization that each platform now offers. You don’t have to go searching to find something you like; it’s delivered to you. When something goes wrong, we pretty much all want the same thing. According to research carried out last year by Forrester Reporting for the software company Khoros:

  • 83% of customers say they feel more loyal to brands that respond and resolve their complaints.
  • Other than price, 83% of customers say good customer service is their most important criterion for deciding what to buy.
  • 65% of customers say they have switched to a different brand because of poor customer service.

What’s the lesson here for brands? Optimize your call centers and customer aftercare. To take a page out of Zappo’s founder Tony Hsieh’s book, it’s important to draw the line between a call center script and the kind of open-ended commitment to customer service that is “Obsessed. Maniacal. Radical.” In today’s age of automation—and in the context of the Great Resignation and labor shortages—can chatbots deliver a first tier of empathetic customer service that filters incoming queries to the right human agent without the need for repetition of details? Whether the query is handled by a bot or a human, there is one thing you definitely want to avoid.

Your answer shouldn’t be the supply chain.

The short answer to any customer service issue is that the most important thing is the remedy. Why it’s gone wrong is important, but the customer wants to know how the brand is going to fix the problem. In the case of the supply chain crisis, that boils down to one key question: “When am I going to get what I ordered?” If you still can’t answer that, maybe you set the wrong expectations at the time of sale.

Originally published on Forbes.