Does Customer Service Matter in the Nonprofit Sector?

August 13, 2012; Source: Triple Pundit

Raz Godelnik, a green business social entrepreneur, raises the question of whether bad customer service is always a bad thing overall. Based on a story about a banker at Wells Fargo, Godelnik cites the ex-Wells banker to suggest, “When it comes to the financial sector, [the banker] believes….bad customer service can indicate a good business.”

The banker, Richard Bove, described the Wells structure at local branches, at least those that were part of Wachovia before it was acquired by Wells, as having a manager stand and greet customers as they walked into the bank to help them. Bove then described a shift from the helpful-manager function to a desk where an employee was selling bank products. According to Bove, who liked the change, “Spending time solving problems with people is not selling products…It’s wasting time.”

Godelnik elevates the discussion from customer service at the local branch to questions about broader issues of corporate social responsibility. “(I)f Bove is right,” Godelnik muses, “it can actually apply that stakeholder engagement or even sustainability as [a] whole might be just ‘a waste of time.’” He asks, “Is it possible that in some cases less sustainability means better business?” He suggests that one reason why Wells hasn’t suffered with a lesser (than Wachovia) customer service model is that, “Basically, customers just don’t care much about these issues, or don’t care enough to leave the bank if they’re unsatisfied, as long as the bank sells them good products.”

Let’s face it. Are consumers checking for corporations’ glossy social responsibility reports before they pick Starbucks over Cosi, Dunkin’ Donuts, or Seattle’s Best? Godelnik suggests that it isn’t the mass of consumers influencing corporations nor the inchoate corporate mantra for good customer service that is changing bank policies, but rather a small number of activist consumers, such as those with online petitions at Change.org or other such social protest venues. Godelnik cites the successful customer activism that got Bank of America and other banks to ditch their proposed fee structure for using debit cards for purchases. He concludes that the real answer is one of balance—of corporation Raz Godelnik s doing the right thing for customers and doing the right thing for shareholders, and finding that the two aren’t mutually incompatible.

How does that conclusion play out within a nonprofit sector in which some nonprofits fundamentally operate as deliverers of government services and, unlike the banks or coffee shops, do not work in a competitive retail environment? Maybe the implication of the Wells Fargo story is that customers don’t need to be soft-soaped by effusive demonstrations or corporate concern for their well-being, but simply treated decently, fairly, and professionally. The same probably holds true for nonprofits. Being professional, appropriate, and courteous is what everyone ought to expect. Pardon the unfortunate truism, but in business, government, and the nonprofit sector, we should all try to avoid an environment comparable to waiting in line at the Division of Motor Vehicles office.—Rick Cohen