Does Having a Monopoly Excuse You From Having Good Customer Service?

Having good customer service is seen as a way to maintain customers and boost profits. If you treat your customers well, they will want to return and choose you over your competitors.

But what if you don’t have any competitors? What if you have a monopoly? What if you have no short-term fear of lost profit or market share? Are you still obligated provide “good” customer service?

My colleague Brian Cantor wrote a fantastic article last week regarding the crashing of the ESPN Fantasy Football app during Week 1 of the 2016 NFL season. He wrote:

“There are many scenarios in which the business has complete leverage over customers. Perhaps the customer does not have the option to switch. Perhaps demand for the product is so great that one lost customer represents a mere drop in the bucket..”

The ESPN app failing to launch during opening day of the biggest sports league in the country brings up a question for many other companies who are seen to have a monopoly in their respective industries. If the potential for lost business is not an immediate concern, what motivation does an organization have to deliver a great customer experience?

Amtrak, for example, can be filled with train delays and stuffy stations and there’s nothing the customer can do. It is the only train service that serves the entire Northeast Corridor. While you have typically have several choices for buses or airlines, Amtrak is almost always the only train service you can take. It can charge whatever it wants and can schedule whenever it wants. We the customers are completely at Amtrak’s mercy. What does it owe us?

I have seen a large number of complaints posted in online forums regarding different cable companies. Cable companies generally have natural monopolies within their regions of operations; in the Washington Heights section of New York City, for instance, your only option for cable and Internet is Time Warner Cable. Time Warner Cable customers will often issue complaints, including lengthy hold times, poor communication from representatives, problematic internet connections and the inability to schedule convenient tech support appointments. The sentiment may be sour, but this is not necessarily hurting TWC – in 2016, everyone…and I mean everyone…needs internet and television.Unless TWC customers literally move to non-TWC neighborhoods, they will have no choice but to continue TWC.  There will not, therefore, be a major loss in business.

As someone who keeps a kosher diet, I have personally found myself in this situation. No matter where you live, the kosher opportunities are normally limited.  Lacking competition, these restaurants can offer subpar experiences – long wait times, poor service – without much consequence. While it is certainly true that this poor service can partially be attributed to cost-cutting (compensating for the fact that kosher food is more expensive to source), these restaurants still charge high price points. There are no McDonald’s or Burger King equivalents in which people pay $1 for a burger and thus tolerate a “$1 experience.” Kosher customers still understand the value of a dollar, and when they are paying premium price points for food, they have every reason to expect a solid caliber of service.

Moreover, while cost containment may necessitate smaller staffs, it does not necessitate a less cordial, less customer-centric experience. This, unfortunately, is what many kosher restaurants offer – and people like me are forced to return because I have no other options. Competitors do not typically emerge.

So we return to the original question: does having a monopoly exempt you from pressure to offer good customer service? If your end game is profit, and you know you’ll make it no matter what, can you do whatever you want and then count your dollar bills?

The answer may, unfortunately, be “yes” in the short-term.  The normal risk is that you would lose your customers to competitors or they would stop purchasing this “luxury item” altogether. Those risks do not apply in these cases because there is nowhere else to go. I think, in all honesty, there really is no urgent need to provide a good customer experience. If your end game is profit, you’re probably in the clear.

Consequences can, however, emerge in the long-term.

We live in the age of the empowered customer; these customers are always looking for opportunities to take their power back. A colleague of mine has begun flying to destinations he used to take the train to; since airlines do have competition, their prices and experiences are often more appealing. I have seen cable customers drop television from their packages, sticking only to internet and using devices such as AppleTV and services like Netflix and Amazon to watch their desired programs and sports.

However, I echo what Brian wrote in the aforementioned article. There’s a reason “customer experience thought leaders compel brands to deliver the best possible customer experience.” Companies and brands MUST hold their reputation to as high a standard as possible. They say “only father time is undefeated” because nothing lasts forever. Telecom companies, including Verizon FiOS, have started to compete with cable companies in some regions. Streaming services have, moreover, made dropping cable a much more realistic option. Other travel services – buses, airlines, car sharing services – can help customers navigate routes previously dominated by trains. Furthermore, while the risk of competitors in the kosher food business may be low, it is not impossible. Should a new customer-centric kosher restaurant enter the market, those who neglected customer experience will be in big trouble.

Great companies know this. After all, there’s a reason the ESPN app was working perfectly this weekend!