It turns out that making customer service interactions as insufferable as possible is a nine-figure business.
Driving the news: A recent study by a Stanford University economist found that the so-called ‘annoyance economy’ — think long hold times, spam messages, and hidden fees — costs consumers in the U.S. $165 billion a year.
The report found that companies are intentionally making it as difficult as possible for us to do everything from cancelling subscriptions to getting a flight refund.
Why it’s happening: Turning basic customer service interactions into a test of mental willpower is quite profitable, especially when it comes to cancellations. A separate study found that companies' revenue can jump by up to 200% by simply making it harder to cancel subscriptions to their product.
In one of the more egregious examples of this, CashApp was fined last year for providing a fake customer service line that just directed customers to a pre-recorded message.
Why it matters: These types of interactions have always been tedious, but AI has now given companies a convenient excuse to cut customer service jobs while making issues even more difficult to resolve — all under the guise of providing more efficient service.
As AI chatbots have taken over customer service desks, research shows that Canadians’ and Americans’ perception of their experience as customers has hit a record low.
Our take: Annoyance isn’t just a byproduct of cost-cutting, it’s a calculated strategy for many companies that are betting people would rather give up a few bucks than jump through a frustrating series of hoops. Unfortunately, that bet seems to be paying off.—LA
