Dear Mr. Berko: After spending 55 minutes on the phone with Verizon and being switched to four different departments, I think I got my problem solved. Then I had to call American Express and was placed on hold for probably five minutes. (The people there always keep me on hold.) Later that day, I had to fix a dispute with American Electric Power, which is my utility. The people there kept me on hold twice for over 10 minutes. This happens too often, and though this isn't an investment question, you're the only person I know who can tell me why this is happening. — KL, Columbus, Ohio
Dear KL: It is becoming epidemic and reminds me of my semimonthly gas station visit — with fast, efficient and courteous self-service. It's getting worse, worser and worserer.
In 2006, American Express (AXP-$77) had 66,000 employees, helping it generate $26 billion in revenues and $3.6 billion in profits. Ten years later, AXP had only 54,000 employees but produced $32 billion in revenues and $5.1 billion in net income. Verizon Communications (VZ-$53) in 2006 had 241,000 employees helping it produce $88 billion in revenues and $6 billion in net income. Ten years later, VZ had only 170,000 employees, but it produced $127 billion in revenues and $16 billion in income. And in 2006, American Electric Power (AEP-$64) had 20,200 people on the books, producing $12.6 billion in revenues and earning $1.1 billion. Last year, AEP had only 17,400 employees but generated $15.6 billion in revenues and $1.8 billion in earnings.
The company's having higher revenues and fewer employees is why you wait so long to talk to an American Express employee if there's a problem to fix. The same logic applies with your needing to wait (it seems like forever) to reach a VZ person on your cellphone to request a repairman to fix your landline. And the company's ability to make more money with fewer employees is also why the AEP clerk needs three months to issue a credit to your bill. Get this through your head. And honestly, none of these companies gives a fig.
It's why the service at Starbucks stinks and you'll wait three minutes in an empty store just to get waited on. It's why you wait and wait to pay for a candy bar at CVS and why Regal Cinemas has two ticket booths open (even for a blockbuster movie) rather than four, causing long, pushy, snaking lines. It's why it's difficult to locate a salesperson at Dillard's or Macy's and why it's so frustrating to have your car serviced at a BMW or Chevrolet dealer. And it's why, when you call a catalog company or an advertiser on the internet, you're placed on hold as a sincere-sounding voice recording opines every 20 seconds, "Your call is very important to us." Hmm!
American industry has discovered that it can fire 10 employees and distribute their duties among five employees without increasing their pay. This is called telescoping, and American industry will continue to telescope until the cows come home — even after they come home. Though the resulting service stinks, corporate America knows that consumers have the emotional range of Formica — like uncomplaining cows grazing in a pasture. After years of second- and third-class service from uncaring and ignorant employees, consumers have become accustomed to inferior and incomplete outcomes. That's just ducky, because American CEOs are more interested in growing revenues, profits and dividends than they are in consumers' satisfaction, which they know is fungible and malleable.
Resultantly, over the years, consumers have learned to become less and less demanding. Millennials don't mind waiting 40 minutes in a Verizon store, 30 minutes in a bank line or two hours in a doctor's office because they've been groomed to wait. Pathetic! However, for consumers who were born in the 1930s, '40s, '50s or '60s like us, it's contemptible and a hard blow to swallow. It certainly gets our dandruff up. Unless you have a pile of money to hire a professional shopper, you'd best get used to it. Corporate America offers the best second-class service money can buy.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at [email protected] To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.