August 29, 2025
The Decline of Customer Service: A Culture Problem

Is Good Customer Service Slowly Dying?

Good customer service is becoming rare and that’s a serious problem. Mistakes aren’t what drive customers away; it’s how businesses respond to them. Too many leaders allow cultures of excuses, defensiveness, and cost-cutting to replace genuine care and accountability. The result? Bad experiences, lost loyalty, and reputations eroded faster than ever. Customer service isn’t dying because of technology or scale it’s dying because leadership and culture are failing to prioritise it. Businesses that ignore this risk collapse. Those that invest in people, empower staff, and treat complaints as opportunities can win loyalty where others lose it.


Introduction

It feels like every time we encounter truly great customer service it stands out as the exception rather than the rule. The reality many of us face is that poor service has become increasingly common. Whether it’s being left on hold for far too long, receiving scripted and robotic responses, or being met with indifference when raising a legitimate concern the bad experiences are stacking up.

What’s most worrying isn’t the mistakes themselves. No business is perfect, and errors are inevitable. What matters is how those errors are handled. Too often today, instead of taking responsibility, businesses respond with excuses. Instead of correcting the issue, they attempt to deflect blame. And instead of a genuine apology, customers receive hollow, templated replies designed to close the conversation quickly rather than resolve the underlying problem.

This raises a bigger question: is good customer service slowly dying?

From my perspective, the decline in service quality is not about a lack of tools or training. It’s about leadership, culture, and the values businesses choose to prioritise. And if companies don’t start taking this seriously, they may soon learn that poor customer experience doesn’t just frustrate people, it drives them away for good.


Why Bad Service Costs More Than Leaders Realise

The simple truth is this: bad customer service equals lost customers.

Yet many organisations still behave as though customer loyalty is guaranteed. They act as if people will tolerate delays, poor communication, and weak excuses because it’s too inconvenient to switch providers. That kind of complacency is dangerous.

Customers today have more choices than ever before. Competitors are just one click away. Switching has never been easier, and reviews travel further and faster than ever. A single bad interaction doesn’t just risk one customer leaving it risks dozens, or even hundreds, deciding they don’t want to take the same chance.

Think about it: how many times have you heard a friend say, “I’ll never use that company again” after a poor experience? How many times have you yourself written a review or posted online about disappointing service? These ripple effects spread far beyond the single moment of failure.

Yet many businesses still don’t grasp the cost. They tally up complaints as “noise” instead of recognising them as flashing red warning lights. They downplay the importance of service recovery, preferring to focus on efficiency metrics and call closure rates rather than trust and loyalty.

But here’s the reality: all the branding, advertising, and marketing spend in the world can’t protect a business if its reputation is slowly being chipped away by poor service.


The Leadership and Culture Connection

In my view, the decline in customer service has its roots in leadership and culture.

1. Leadership Sets the Tone

When leaders genuinely care about customers, it shows. It shapes the values, the priorities, and the way the business responds to challenges. Conversely, when leadership focuses solely on short-term financial results, service quality often becomes a casualty.

For example, if executives reward managers for cost-cutting above all else, frontline staff feel pressured to move customers along as quickly as possible not to solve their problems properly. If leadership communicates that customer complaints are an annoyance, staff internalise that attitude and reflect it back in their interactions.

Leaders don’t just set the targets; they set the tone. And the tone matters.

2. Culture Shapes Behaviour

Culture is what employees do when no one is watching. If culture encourages pride in solving problems, customers receive care and attention. If culture is indifferent or punitive, customers get scripted answers and minimal effort.

An empowered culture equips staff to act. It allows them to say “yes” when a solution is needed rather than hiding behind rigid rules. A toxic culture does the opposite: it strips staff of agency, creates fear of making mistakes, and reduces service to a box-ticking exercise.

The companies that deliver exceptional customer service aren’t those with the biggest budgets. They’re the ones where employees feel respected, trusted, and aligned to a shared mission of putting customers first.


The Efficiency Trap

One of the great ironies of modern business is that technology designed to improve service has often made it worse.

Automated phone menus, chatbots, outsourced call centres in theory, these tools reduce cost and increase efficiency. In practice, they often leave customers stranded.

We’ve all been there: trapped in a loop of “Press 1 for billing, press 2 for support,” only to end up speaking to someone who has no authority to fix the issue. Or we’ve typed our query into a chatbot only to receive irrelevant canned responses that don’t come close to solving the problem.

Efficiency on paper doesn’t mean effectiveness in reality. Customers don’t remember how quickly you picked up the call if you didn’t solve the issue. What they remember is how you made them feel. And too often, these so-called efficiency gains make people feel frustrated, devalued, and ignored.

The obsession with cost-cutting in customer service is shortsighted. Saving a few dollars today means little if it costs you the loyalty and lifetime value of your customers tomorrow.


Complaints Are Opportunities, Not Threats

Another shift that I’ve noticed is how many businesses treat complaints. Instead of seeing them as an opportunity to learn, they treat them as a nuisance to shut down.

But complaints are gold. They give you a direct line of sight into what’s broken in your business. They highlight where your processes are failing, where your team needs support, and where customer expectations aren’t being met.

Handled well, complaints can actually deepen customer trust. When someone has a bad experience but sees the company own the mistake, apologise sincerely, and fix it quickly, they often become even more loyal than if nothing had gone wrong in the first place.

Handled poorly, though, complaints accelerate the decline in trust. Customers can forgive mistakes; they rarely forgive being dismissed.


The Questions Leaders Must Ask

If we accept that customer service is in decline, then leaders must confront some tough questions:

  • Are we modelling the behaviour we want our teams to show customers?
  • Do our metrics reward genuine service quality, or do they prioritise speed and cost?
  • Are we empowering our people to solve problems, or constraining them with rigid rules?
  • Do we treat complaints as an inconvenience, or as a valuable chance to improve?
  • And most importantly: do we recognise that poor service today risks destroying customer loyalty tomorrow?

These are not easy questions, but they are necessary ones. Leadership without accountability will never build a culture of service.


Why Businesses Can’t Afford to Ignore This

The bottom line is simple: poor service destroys businesses.

Customers don’t leave quietly anymore. They share their frustrations publicly. They compare options. They move to competitors who value them. And once they’re gone, winning them back is extremely difficult.

The companies that will succeed in the next decade won’t be the ones with the flashiest marketing campaigns or the most aggressive pricing. They’ll be the ones that understand the timeless truth that customers want to feel heard, respected, and valued.

This isn’t just about resolving problems. It’s about building trust. Every touchpoint matters. Every apology matters. Every action (or inaction) reinforces the message a business sends about what it truly values.


A Final Word

So, is good customer service slowly dying? From where I sit, it often feels that it is on a steep decline. But it doesn’t have to.

The decline in service quality is not inevitable. It’s a choice a by-product of leadership priorities and cultural values. If leaders continue to undervalue service, dismiss complaints, and chase efficiency at the expense of effectiveness, then yes, customer service will die. And when it does, it will take those businesses with it.

But for those willing to challenge the trend, there’s an opportunity. An opportunity to treat service as more than a function, to see it as a defining feature of culture and brand. An opportunity to win loyalty not through slogans, but through everyday actions that show customers they matter.

Because at the end of the day, great customer service isn’t about processes, scripts, or technology. It’s about people. It’s about leadership that values trust over excuses. It’s about cultures that empower employees to care.

And it’s about remembering that customers may forgive mistakes, but they won’t forgive being treated as though they don’t matter.

Good customer service isn't a luxury it's your most powerful competitive advantage.


If your business is ready to transform its customer experience and build a culture of trust and excellence instead of it being the problem, Josty can help. We work with leaders to design and implement strategies that turn your customer service from a cost center into a growth engine.


Find out how Josty can help you earn lasting customer loyalty at josty.nz.


Post written by Jason Jost