Is licensing killing customer service?

By: Nathalie Schooling

In theory, it makes perfect business sense. Outsource as many of your business processes as you can – everything from sales to technical support – thereby avoiding the costly process of putting your brand in front of consumers yourself, slashing your overheads, and placing much of the financial risk on the shoulders of the licensed outlet or franchise.

It’s a business model that has worked for decades and the continued stellar growth in the franchising, licensing and outsourcing industry is testament to its appeal and success.

But if outsourcing a customer-facing or customer care aspect of your business means you effectively lose touch with the needs of your customer and, even worse, fail to ensure that those needs are being met, how sustainable is this business model really?

A case in point: Apple. It’s a brilliant brand that’s still growing internationally in leaps and bounds thanks to the reliability, accessibility and ‘must have’ appeal of its products. Unfortunately, the same can’t be said of the people licensed to sell and service these products. A visit (for example) to the iStore invariably leaves the once happy Apple customer with a distinctly lemony taste in their mouth. The focus is clearly on ‘sell, sell, sell’. Which is all good and well, if it is supported by an equal priority on ‘service, service, service’. Unfortunately, with the iStore, this is clearly not the case.

If you don’t believe me, just take your iPhone or iPod into an iStore and tell them it needs to be repaired. Then watch as the friendly ‘sales’ faces that greet you turn into blank stares. Chances are good you’ll leave with your broken iPod still in your pocket. If you’re lucky it’ll be nestling next to a business card of some obscure small business that might be able to do the repairs you need. Again, if you’re lucky.

So, while the Apple mothership must be smiling all the way to the bank when it comes to sales figures, one has to wonder if it is blissfully unaware of the growing tide of discontent amongst those who have so willingly swelled its coffers in recent months and years.

And it’s not just Apple that needs to address the customer satisfaction levels delivered by its licensed stores if it wants to retain a healthy slice of the SA consumer pie. There are any number of international businesses that are potentially facing the same issue.

For instance, after trying, but failing dismally, to get one of our HP printers repaired, but being met with complete apathy and ineptness, N’lighten’s next office printer will almost certainly not be HP. Don’t get me wrong, HP is a great printer – I just couldn’t face the same kind of useless service from HP’s licensed service providers the next time I need help. So I’ll be moving on to a different brand.

The problem, it seems, is not so much that these big companies don’t understand the need for service excellence, it’s just that they don’t have the ability (or maybe the will) to police the service delivery of their global franchise or licensed stores and service providers. And if those stores are the face of your brand, they need to be delighting your customers with service that makes them smile happily. Otherwise you are bound to be facing a serious drop in sales figures somewhere along the line. Even if your name is Steve Jobs!