TetraMesa

Bad Customer Service? Or Market Opportunity

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One Family, One Month, Multiple Customer Service Failures. Many Insights.

Over one month, we logged bad customer service experiences for our family. It’s not a formal study. We did it because the same kinds of friction kept showing up. We’re both marketers. One digital product person and another corporate brand manager. When we go to the store, it’s not just shopping, it’s consumer ethnography. We look at everything from shelf placement and sight lines to unit pricing and sales patterns. So after a couple of bad experiences, we thought, “I wonder… we typically just power through minor annoyances and move on. But let’s just look a little more carefully for just one month and see what happens.”

The log at the end is the raw material as reference, though this isn’t about one family’s month. We all know anecdotes are not statistics. And yet, asking around, our experience seems to be typical. The opportunities for grabbing market share becomes a question because there doesn’t necessarily seem to be competitive pressure to do better. If everyone is squeezing bottom line costs and that’s the pervasive value, a tacit industry agreement to just be lousy because of desired margins might be hard to overcome.

There is an opportunity for those who want to try for better though. That opportunity exists because many markets today are not defined by scarcity. They are defined by abundance, substitution, and constant competition for share. There are more choices, more channels, more software, more automation, and more messaging than ever. Yet in many categories, the customer experience feels worse, not better.

The Contradiction is the Point

My view is simple: bad customer service may always have been a market opportunity for any company choosing not to participate in the race to the bottom, but may be especially so today. In many industries, the bar has fallen so low that a company does not need an exotic strategy or a dazzling AI roadmap to win incremental share. It may only need to stop making life harder for its own customers.

A lot of companies are creating churn they cannot yet see. They save money short term through weaker support, brittle workflows, badly designed automation, fragmented communication, and policies that make resolution harder instead of easier. Damage shows up later in poor retention, brand trust erosion, and lifetime value. By the time KPI pain is obvious, the underlying customer habit has already shifted elsewhere.

I suspect over the next few years, some firms will discover that what looked like efficiency was actually customer loss. They will realize too late that they optimized for handling costs instead of customer outcomes. Customer service KPIs of call handling can look like it’s doing well when in reality, customers are just leaving. Average handle time and similar KPIs are operational efficiency metrics, not customer-health metrics. That means customer problem handling metrics look better while customer reality gets worse. They can reflect customers giving up, avoiding support, or leaving. Industry coverage has warned against treating service as a “deflection mechanism,” because making support harder to reach can hurt. (See Why customer service shouldn’t be ‘a deflection mechanism’)

Lately, a lot of this seems caused by lame AI chatbots. This is not an anti-AI argument. But bad tool use is still bad tool use. One useful lens is Jevons paradox. It says increased efficiency can reduce the cost of using something and, rather than lowering total consumption, actually increase it. The application to customer operations is not perfect, but when service interactions become cheaper to generate through automation, companies do not necessarily deliver the same service more efficiently. They often generate more outreach, more nudges, more notifications, more scripted flows, and more fragmented touchpoints. The quantity of interaction rises while quality falls.

So customers do not necessarily get better service. They often just get more service surface area to fight through.

That connects to what I would half-jokingly call Scott’s Paradox: when a product or service category becomes overly abundant and overly commoditized, quality can decline rather than improve because everyone is under pressure to squeeze margin. In theory, fierce competition should produce better outcomes. In practice, if one company cuts corners and gets away with it, others follow. So the irony is this: In markets with abundant competition, customers may get worse experiences, not better ones.

Plain Sight

We’re all aware of most of the bullet point problem areas below. Some may be intractable. Others? You decide. Forget about research. Think about your own behavior and reactions. Think about what you would do the moment an alternative surfaces that avoids something like the below issues. It’s not all about overpriced cookies. However, the point is people have alternatives. Push just hard enough and you reach that proverbial Tipping Point.

  • AI chat bots, text and voice, seem to be getting worse, not better. This may be temporary. There’s research showing issues here though. Some of the negativity may be based on different expectations of bots vs. humans, but the reason doesn’t really matter as compared to the outcome.
  • No one has really solved the flood of spam email. This makes people less tolerant in general. It might not be your fault, but it is your problem. Inbox fatigue is at a breaking point. Reports note “notification fatigue” and “click fatigue,” with users developing ruthless habits, like marking legitimate but annoying messages as spam, aggressively unsubscribing/blocking, or ignoring everything non-essential.
  • Shrinkflation tries to trick consumers to accept less for the same money. Until they just choose something else.
  • Customers are conditioned to wait for sales because list prices feel detached from reality. There’s one cookie brand at our supermarket that has become stupidly expensive. They took themselves from a premium to a luxury price. They took a “low involvement, low think” purchase to a thought process more like, “Holy crap, EACH cookie in this package now costs $X? That was more a pricing issue than customer service, but it’s a brand experience failure.
  • Many software vendors still create miserable experiences for customers and employees.
  • No one has really solved endless password resets, authentication friction, and account recovery misery.
  • Subscription cancellation is often harder than subscription signup.
  • Billing errors are apparently easily created, but painful to fix, both for customers and employees.
  • Many apps and websites still offload basic troubleshooting work onto the customer.
  • Companies send too many notifications, reminders, and “helpful” nudges that become noise.
  • Search inside many sites is still shockingly bad, even when search is core to the customer task. If your customers have to use search, AI or Reddit to sort out what to do with you, that’s a problem.
  • Inventory visibility seems often unreliable, both online and in-store.
  • Many self-service systems are not truly self-service. They are just labor transfer from company to customer.
  • Policies are often optimized for internal consistency rather than customer resolution.

The problem is not just bad bots. The bigger issue is the whole operating environment around it. The app is confusing, the website brittle, the phone tree weak, communication is redundant. The terminology changes across channels. Human representatives cannot fix issues because the system or policy was designed around internal convenience rather than customer resolution.

Often, we are satisficing. Customers are neither delighted nor loyal. They are accepting a solution that clears a minimum threshold of usefulness relative to available alternatives. Switching can be costly, inconvenient, risky, time-consuming, or mentally exhausting depending on the product and category. So people stay with products and services that are average, annoying, or subpar because leaving feels worse than enduring. So far. I explored this dynamic more directly in an earlier piece, Why Do Customers Switch? How to keep from being just a Satisficer?.

The Self Delusional Trap

Companies may interpret customer inertia as loyalty when it’s not. They stay customers only until they find a workable escape hatch, then leave with surprising speed. This is why bad customer service can sit hidden for a long time and then suddenly becomes visible as churn.

The strategic opportunity here may isn’t exotic. You may not need to invent a new category to take share. In many markets, there is a simpler path. Reduce friction. Respect the customer’s time. Make your systems easier to navigate. Cut redundant communication. Empower human judgment where judgment is actually needed. Stop forcing customers to absorb internal complexity that should have remained invisible to them.

This sounds obvious, but a lot of firms have talked themselves out of it. They say they know their customer. Usually what they know is a dashboard version of the customer. They know segments, funnels, campaign metrics, and maybe a journey map from a workshop. What they often do not know is what it actually feels like to be on the receiving end of the experience they have built, even though – as people – they probably face similar situations with vendors they use themselves.

These actual experiences of friction matter. Not just individually, but over time. One day, we’ve just had enough. Real experience is also why AI alone will not save anyone from these mistakes. Asking a model to simulate a customer journey is not the same thing as understanding one. AI often regresses toward common patterns, which may be the problem. If the market norm is mediocre service design, copying the norm more efficiently is not a breakthrough. It’s just industrialized mediocrity. I have zero data to back up the following assertion, but I believe that using more AI generated customer persona and user journeys will make this worse, not better. Here’s why…

  • Practitioners under Pressure: Product and marketing people who lean on AI tools to generate Ideal Customer Profiles, User Personas, and Customer Journeys might be the ones going for speed over quality. They’ll generate the basics and call it done. These outputs could reflect the most statistically plausible or commonly expressed patterns, not the most strategically important truths. I don’t think there’s anything wrong with using these tools as starting places. But stopping with them is begging for mediocrity. Or worse, given we know LLMs can sometimes be confidently wrong, product or marketing folks executing further based on poor info may amplify problems.

  • The Tools: Regressing to the Mean: You know what AI Large Language Models are? Averages. They work off of that which has already been. Yes, it’s possible to get new insights and there are methods and hyperparameters like temperature that can be set for more creativity. (If you’re really a glutton for punishment, see my article on LLM / Text Vectors for Product Managers.) Now, for some this may still generate fantastic insights. Even ‘average’ new information can be valuable and new if you didn’t know it! What AI lacks though, is human context. We are still more than just what seems to be getting captured in data. Over time, more agent bots will be transacting. (See my article on BEO – Bot Engine Optimization.) But as long as humans are involved, there’s an overall context, often emotional, that’s not going to get fully captured by automation just yet.

So What Should Companies Do?

Pause. Stop scrambling to vibecode or produce your next artifact or user story for a moment. Start by having product managers, marketers, operators, founders, and executives go through their own customer journey end to end. Search for your own products the way real customers do. Try to find yourself through Search and AI tools. Use your own internal site search. Call your own service line. Try the chatbot. Attempt a return. Unsubscribe from your own marketing. Reset a password. Check out as a guest. Use the mobile app while distracted and in a hurry. If you sell through retail, walk the aisle, find the shelf, look at your packaging, compare it against competitors, and see whether the buying experience makes sense in the real world. Ask store personnel questions. Do they recommend you? Are they even familiar with you? Or the category being sold in their own store? Talk to some people. Don’t just hire a firm or do a focus group. Yes, do those things as well. But get the people who actually make product and process decisions right into the actual customer journey.

Market data matters. But nothing is as eye-opening as direct personal experience with your own broken process. All kinds of crap and slop probably crept in to your process over time. There may be some unavoidable friction points; legal or regulatory issues, especially in some categories. But sometimes it might just be feature creep or historical artifacts that once had value, but now get in the way. There is a special kind of clarity that comes from hitting friction yourself and instantly asking, “Why would they do that?”

And that is the important reminder: you are they.

If you find yourself having that reaction to your own company’s experience, that moment is a signal. It’s evidence that something in the system was built around internal convenience, legacy assumptions, or organizational blindness rather than customer success. The right response is not to explain it away. It’s to fix it. It may be fair to ask the question, “How often is this really happening.” And sure, costs matter. If what you ran into is truly one in a million, fine, write it off. Handle such things as exceptions. Chances are that’s not the case.

Anytime you encounter your own customer experience and think, “Why would they do that?” remember once again: you are they. Then fix it.

Oh, here’s one tactical tip: Make sure your chat bots have a bail out to ‘normal’ customer service. Whether you use voice stress tests for verbal chat bots, or just allow a key press, or for text bots let someone shunt to a real human, make sure to have outs. People are struggling with these things.

Deeper Issues

There is a deeper strategic question here. People may say being merely “better than” is not a durable strategy, and in the abstract that is often true. I love what Alex MH Smith has to say about these things in both his feed and his book No Bullsh*t Strategy. However, many businesses win for long stretches through ordinary competitive mechanics: better execution, better timing, better distribution, better service discipline, and fewer self-inflicted wounds. That might not be as exciting as brand new product categories and world changing innovation. Yet it can still be enough to defend or take share.

In a market where service quality has deteriorated, being noticeably easier to do business with than the competition can matter. It may not be a permanent moat, but it can be a way to win customers now.

Some of the winners over the next few years may be firms that quietly rediscover operational basics while everyone else is distracted by tooling hype. They will use AI where it genuinely helps, but will not confuse automation with service. They will simplify flows instead of multiplying touchpoints. They will cut unnecessary messaging. They will put real people where judgment matters. They will make routine tasks feel routine again. You’ve maybe already seen some marketing by some companies that explicitly exclaim the value of having a real person doing customer service.

Who tends to be best at this? In my experience and likely yours, it is often smaller to midsize businesses where an owner, founder, or local operator is still close enough to the work to care deeply when things go wrong. That is not universally true, and there are exceptions. Some large firms do this well and truly develop customer focused ethos with behavior to match. And some smaller firms are a disaster. But in general, better experiences often come from environments where someone with a stake still has pride in the outcome. This depth of caring is not likely happening at companies where folks are working under their desks trying to hide from the AI optimization axe CFO. Which came first? The employee monitoring due to lack of loyalty? Or the corporate behavior that destroyed earning any?

Many of these things surface as signals hidden inside a month of bad service logs for just one family. Customers are not just buying products. They are continually absorbing the operating philosophy of the companies they deal with. When a company treats them like a burden, they notice. When a company makes simple tasks unnecessarily hard, they notice. And when a competitor shows up that is merely more competent, more respectful, and less irritating, that becomes a market opportunity.

I want to tell you about my personally favorite definition of branding. There’s a lot of textbook definitions. Sometimes they talk about perception. Sometimes about messaging, or a “brand promise” etc. Here’s mine:

A Brand is a Promise Made Over Time.

It’s everything. It’s every touch point. Every interaction. And importantly, it’s over time. It lives on its own and also in an environment with a wide variety of competition. Like any form of reputation, it can take lots of time and work to build into a positive thing, and only moments to damage it.

Right now, with our “better” tooling options, (AI and others), there seems to be a dash towards bottom line success heavier than ever by squeezing Ops as hard as one can. This makes sense in markets with competition from every angle. And it’s often easier to focus on internal things than the messier and hard to understand real world. During this squeeze play, it might be useful to take care. In the rush to optimize the business, do not accidentally optimize the customer out of it. The companies that win here may not be the ones with the most automation, but the ones that remember the customer is not an obstacle.

See Also:

Family Log of Customer Service Fails for March

This was the motivation for this article. It’s not a very exciting section. Besides, you probably don’t need ours. It’s very likely you have your own. It could be we just had a rough month. I may keep the tracking going a couple more months. I think it’s possible we’ve just gotten so used to bad customer service, we don’t even notice; we just deal with it and move on. Hey look, shtuff happens sometimes. We get it. Things aren’t always going to be perfect. That’s life. A lot of this though, seems like “unforced errors” that result from lack of basic attention. Either way, at certain points, it means changes in consumer behavior.

March 23

Funny, even as I try to finish typing this, just 10 feet away, more bad customer service! Some companies, like national brands that have some local retail presence, seem to be optimizing their shipping logistics through private contractor local drop-off. Great. Saves costs and not everything needs to come in a UPS or Amazon truck. But when you use some random person in their 1970s Ford Pinto shows up to deliver something on a rainy day, maybe tell them not to leave it on the wet ground by the garage. It’s just dog food, but I’m not sure how long that package would have held out since it was just the bag. No protective plastic, no shipping invoice. Fine. I’m all for minimal packaging. When we’re both working from home, not a big deal thanks to the door camera alert. Still. Really now?

March 22

Ordered kids’ shoes for next-day pickup but got no confirmation by midday. A human first answered, then disconnected. The phone chatbot was the usual useless loop of order and identity questions and resolved nothing. A later human confirmed the order was in and being processed, and the confirmation finally came. Bottom line: weak human support still worked; the chatbot was mostly infuriating.

March 18

A contractor on a digital product missed a task deadline and then went non-responsive in both the project system and email. We later learned there had been a family issue and got it sorted out. Fair enough, but it was still another avoidable obstacle to manage.

March 15

One of our newer iPhones would not charge properly with an older backup charger. Between wattage differences, cable quality, and unclear standards, this stuff is far less obvious than it should be. The question is, did the industry do this on purpose to force us all into needing $100 worth of cable management?

March 11

Our community center where we are paid members advertised a children’s enrichment class, but when we tried to sign up in the app, the cart and purchase flow were unavailable. We will probably call and hear, yet again, that the app is unreliable and everyone knows it.

March 10

With a new health plan, we enrolled in automatic pharmacy service and thought it was confirmed. The postal letter looked like a confirmation, but a small unexplained warning-style icon actually signaled a problem. Later, I got a call that the prescription was ready locally at the old delivery place, which made clear the setup had failed or stalled. I think I sorted it out, but the communication was absurdly unclear.

March 9

As administrator for a family estate account, I called a financial services firm to understand their procedures after a client death. It was hard to even find the right number. I got conflicting guidance, was told to mail paperwork without any clear attention line, got referred to a “Life Events” number that was having technical issues, and then received a callback from someone who had confused me with another caller entirely. A messy process for a delicate situation that should be handled cleanly.

March 6

We are dealing with a relatively minor legal matter. The lawyer seems competent enough, but the follow-up is poor and we often have to push for information. When their paperwork process had issues, I strongly suspect we still paid for the wasted time. We are somewhat trapped until the matter is over, which makes the weak service even more irritating.

March 6

Of all the things to go wrong! Automated backup software stopped working because it needed an upgrade, but there had been no warning at all. There was no obvious in-product way to check version or updates, so customer service email was required. To their credit, support responded within a day and solved it.

March 4

We bought a ski-and-stay package for a discount, but the booking and ticketing flow was split and confusing. The confirmation email linked back to a cart showing full price ski lift tickets, and resolving it required deleting the cart, finding the right link, and entering what was called a “Validation Number,” which was actually labeled a “Confirmation Number” from one specific email, as opposed to an earlier reservation confirmation note. A great phone rep helped us fix it, but the process was a maze. One she knew how to navigate as she’d been through it before. Separately, a child on a Vermont ski pass can only reserve within a week, even though parents may need to buy lodging and tickets earlier, creating a ridiculous risk that the family commits money to a reservation in advance, but the child’s desired ticket date(s) may be blocked when you go to sign up at the required time.

March 4

Mac Optimization Software
I bought an additional license for a second machine, but the unlock process insisted I only had one license. When I tried to contact support through the website, the submission flow stalled after I had already written out the issue. I left the tab open and, about 30 minutes later, was finally able to submit it. (Not yet resolved though.)

March 2

Our snowblower engine may be dying, so I brought it to a local repair shop after trying the basic consumer fixes myself. They have had it for weeks, missed at least one snowstorm window, and have been poor about answering or returning calls. Each in-person visit produces vague updates but no clear resolution. At this point, the repair may become more costly simply because of all the trial-and-error.

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