Does Customer Service Matter in the Nonprofit Sector?

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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 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

  • michael

    Customer service means serving the customer’s priorities. In that is a HUGE lesson for nonprofits. Too often human service agencies serve the needs of their funders first, clients second…which is he explaination for burdensome paperwork, lengthly queues, disnegaged case managers.

    Not surprising, since for nonprofit staff the funder is the primary customer. But this is also the reason so many poor/needy people avoid getting the help they need, the engagement proces is too dehumanizing.

  • Ruth Ann Barrett

    The lines that matter to me aren’t at the Motor Vehicle Department but at our health clinics, food banks, and homeless shelters as they reflect how important generosity is as an antidote to greed and gratitude is to feeling connected and having empathy for our fellow citizens who are in danger or in need.

    What customer service is about is not so much what one does or delivers, but of the responsibility and respect found in the relationship of buyer and seller. The better question, then, is to ask, Do relationships matter in the non-profit sector? The indicator or measurement of this is reflected in how an organization treata and communicatea with folks who come in the door, their employees, their partners (do they even have any?) and their relationship with the community at large.

    And yes, I used to be a customer of Wells Fargo who has since moved to a local credit union and I gladly wait in line. More customers are starting to vote with their feet as research shows an increasing willingness of consumers to choose socially responsible business partners and non-profits that connect with them on a personal, authentic level and, in the case of some I hope, pay their employees a living wage.

  • Cummins

    While I agree with some points of the comment made previously, the issue is that nonprofits DO have a responsibility to meet the demands of both funders and clients – not one or the other. Working in nonprofits makes it only too clear that there’s more than one client and more than one type of customer one has to serve – and that includes clients who give you money so you can provide services to those who need your expertise. Otherwise, you won’t have the funds to have programs that do this important work.

    As development staff I may have a different take than some program staff will. But I’m afraid the demands that funders have on your time and effort to show them how their money helps isn’t much different from the demand that we, as consumers, have on product suppliers when we buy something. If I’m at a gas pump and have just given $20 for gas, then I expect to get what I’ve paid for – gas – and not the “promise” of gas or gas at some point down the road. I also don’t expect to be treated like crap (even if I don’t expect much else while at the gas station) or told that “it’s not important whether or not I have gas,” either. As I can take my business to another gas station, a funder can and will take their dollars someplace else that can provide better service.