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Published Sep. 27, 2005

Increasingly, companies are shifting toward communication by phone and Internet and reducing face-to-face interaction. Why? Blame the bottom line.

"Through these doors pass the most important people in the world. Our customers and our employees."

TECO customer Vicki Nelson stomped right past that sign in the lobby of TECO Energy's headquarters the other day.

Trying to clear up a billing problem in person, the Tampa woman was told to pick up a phone in a cubicle. After a couple of minutes on hold listening to elevator music, Nelson hung up in frustration. "This is ridiculous," she said as she jogged to her car parked outside the building in downtown Tampa. "And now I've got to check that I didn't get a ticket at the parking meter."

Call it an unspoken tenet of today's customer service: Companies may love their customers _ but from a distance. Increasingly, they are taking steps to limit or prevent face-to-face encounters.

It's a trend that has been building for years, rolling through the auto finance industry and other financial service companies. Airlines and hotels are offering Web discounts to persuade customers to book online. The call center business is booming.

Some businesses are merely de-emphasizing face-to-face interaction. Others are eliminating it completely.

TECO, parent of Tampa Electric and People's Gas, this summer is shutting down its customer service center in downtown Tampa and two other locations. As Nelson learned the hard way, TECO already declines to deal with service issues about People's Gas in person, accepting only bill payments at its headquarters.

TECO will keep seven offices in its 2,000-square-mile service area where clerks accept payments slipped under bulletproof glass but don't answer customer queries.

Elsewhere in downtown Tampa, executives with the Hillsborough County Water Department no longer have to worry about brushing by an irate customer in their lobby. The customer service operation there was shut down in January, and the department refuses to take even drop-off payments from customers who work downtown.

Keith Templeman, administrative support manager for the water department, said downtown workers continue to come in to the office, upset and surprised that they cannot talk about their bills. "I personally don't agree with it," Templeman said of the decision to close, "but I was overruled."

St. Petersburg-based Florida Power Corp. still has representatives at its 32 business offices who will answer questions. But spokeswoman Mary Estes notes that demand for face-to-face contact has diminished and the service is under review as part of the pending merger of its parent, Florida Progress Corp., with Carolina Power & Light.

Utilities are hardly alone in cutting back on personal contact, even over the phone. Call 411 for information in some areas and an automated system listens to your request, then spits out a phone number without any intervention from a live operator. Just last week, Bank One shareholders blasted executives at their annual meeting for difficulties in getting a person on the phone when they call the Columbus, Ohio, bank.

Then there's the controversy Fidelity Investments created last year. The mutual fund giant started forcing low-value investors to communicate with the company through an automated phone system. Only high-value investors were able to get through to a human being on the phone.

"Sad to say, the one-on-one, face-to-face kind of customer service interaction you're just not going to see as much of that anymore," said Roger Nunley, managing director of the Customer Care Institute in Atlanta. "A lot of it comes down to the old bottom line, unfortunately. Weighed against what it costs, many companies are opting out."

The International Customer Service Association, an industry group in Chicago, is studying the face-to-face falloff for the first time in a benchmarking study due this year. Other groups and consultants say they haven't quantified the change but do not doubt it is happening.

And for obvious reasons. Why shouldn't companies steer customers to call 800 numbers or click on to their Web sites? Both options are less expensive, more efficient and safer than dealing with disgruntled customers face to face.

"It's very expensive to have a live person in an office twiddling their thumbs, waiting for someone to come in," said Cindy Grimm, director of benchmarking for E-Satisfy, an Arlington, Va., company that studies customer satisfaction.

For customers, as well, there are benefits to the electronic transformation.

Telephone and Web access can be available 24 hours a days, seven days a week. One can e-mail a complaint from home or work _ no waiting. Online payments through the Web are instantaneous, with no fuss or cost of postage.

Penni Allison, director of customer services at TECO, said all 40 employees at TECO's walk-in customer centers are being redeployed to work the phone banks as part of its face-to-face phaseout. As a result, she said, the utility has expanded its call center hours, added Saturday service and cut back on the average phone wait time from two minutes to less than a minute.

By contrast, the 30,000 walk-in customers a month at its North Tampa office were waiting eight minutes on average to talk to someone.

There is a trade-off, though.

What's getting lost, Nunley and others say, is a degree of customer service and the long-term customer loyalty that can come in return.

It's easier for a company to turn down a customer over the phone _ and it's unlikely the customer will feel as much attachment to a company that is one step removed.

One bank's about-face

First Union Corp., better than most, can attest to the risk of getting impersonal.

The country's sixth-largest bank two years ago rolled out its "Future Bank" concept. Instead of help from tellers and branch managers, customers who came into its branches were urged to go to cubicles and pick up a phone connected to the bank's customer service call centers. The bank fired hundreds of tellers.

Within a year, its revenues sagging, the bank did an about-face on its face-to-face plan.

Beth McCague was put in charge of picking up the pieces at First Union a year ago in the newly created position of head of corporate customer service. She now says Future Bank was misunderstood from the outset.

"Future Bank is nothing more than offering more choice to customers," McCague said in an interview last week. "In the deployment phase, with all the right intentions, we had many customers feeling like they were being forced to use the phone . . . That wasn't the intention."

McCague said the bank "learned a lesson" to listen to its customers and offer them a choice of visiting a brick-and-mortar branch or using the telephone or Web as they see fit. Branches still have phone-equipped cubicles but their use fell 40 percent after workers stopped prodding people to use them.

That "bricks-and-clicks" message was drilled into training sessions as the bank beefed up its branches with 1,500 more tellers and 300 "service specialists" over the past year.

"If a customer came in and was upset about a problem with an account, we drew lines in the sand and said this person should never be put on the phone," McCague said. "We want a very personal handling of the customer problem."

First Union points to internal surveys as evidence the new, measured approach has had an impact. The number of customers in Tampa who reported having a very bad experience at a branch dropped from 6 percent in the third quarter of 1999 to 3 percent in the first quarter of 2000 while the number of "very or extremely satisfied" customers rose from 60 percent to 64 percent.

Unlike utilities that enjoy monopolies, banks have to compete to keep customers, McCague said. "There is not a spigot of customers that keep coming. We have to treat our customers as cherished."

John Goodman, president of E-Satisfy, said most companies realize they need to dedicate at least some resources to customers who insist on face-to-face contact. One company, which he declined to specify, calls that segment of customers its "Blue Hairs," generalizing that it is dominated by older women.

To Goodman, the bigger threat to customers is that the level of service they receive increasingly will be based on how much wealth they bring to the table. Such segregation, highlighted by the Fidelity case, is nothing new.

Airlines are the classic example, routinely treating their better customers with more perks and better service. Now, some banks use computer systems that route calls from customers based on their value to the bank.

Focus on the future

Customers who crave contact may have to settle for virtual face-to-face encounters in the future. The Web could make companies and their contact-driven customers happy.

With real-time audio and video, a customer and a company rep who are hundreds or thousands of miles apart could work through a problem together. They could manipulate data in an account at the same time, watching the same screen.

Companies have the safe and efficient contact with customers they covet; customers get a sense of the personal touch.

First Union is among the companies keen on using a simultaneous broadcast over the Web that lets someone on its Web site see _ or at least hear _ a person with the click of a button.

But McCague, the bank's customer service guru, doesn't think most people are ready to dump their branch for an online-only connection. More people use ATMs and the Internet, but the number of paper checks circulated in the economy still is rising. Recent studies show the use of checks will hit a high in 2006 and plateau for several years before gradually declining.

A true transformation to virtual banks "is way out there in the distance," McCague said. "I don't think it's 10 years out. I don't think it's 20 years out."

In the meantime, companies have to avoid offending a customer base that's not ready for a face-to-face cutoff, said Nunley of the Customer Care Institute. He cites study after study that reinforce the same conclusion: "Customer loyalty is very easy to lose," he said, "and incredibly hard to get back."