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Why the Debt Crisis Could Improve Customer Service

You don't have to be a macro-economist to know that the US economy is headed for disaster if Congress fails to raise the nation's $14 trillion debt ceiling.

If a deal isn't reached before Aug. 2, the government could default on its obligations. Social Security checks might not be cut. Interest rates on car loans, credit cards and mortgages could soar. Businesses might have trouble getting loans. The stock markets could go into free fall.

I'm not the first person to use the term "Armageddon" to describe the likely fallout.

But I may be the first to say it would not be a customer-service Armageddon.

True, as a general rule, companies under financial stress don't serve their customers. You need to look no further than the domestic airline industry, and particularly the legacy airlines, which all but ignored their customers when times got tough.

Worst of Times -- Best of Times?
A government default would place an enormous strain on American businesses. It would have a ripple effect through the world economy. And many businesses would chart the same course the airline industry did after 9/11, cutting services and amenities that customers had come to rely on, outsourcing customer service functions and eventually hurtling toward bankruptcy and in some cases even insolvency.

But some airlines, and indeed, some companies in the hard-hit travel and tourism business, went in the other direction. I know because I watched it happen.

For example, JetBlue Airways, then a start-up carrier, "zigged" when the big airlines "zagged" by offering uniformly comfortable one-class service with leather seats, free inflight entertainment systems and free snacks, to all of its passengers at precisely the same time its competitors were cutting back. Oh, and it also had reasonable airfares without the unreasonable fare rules we've become so accustomed to complaining about.

Another company, Four Seasons Hotels and Resorts, refused to trim its workforce or slash amenities during the last recession. Other hotel chains were terminating programs that customers had loved, eliminating everything from free newspapers to turndown service. Not Four Seasons. In 2009, I interviewed its CEO, Isadore Sharp about his philosophy of dealing with hard times.

"Providing exceptional experiences to our guests is a fundamental part of our business model and has been the foundation for our success, through good times and bad," he told me. "In times of uncertainly, our guests value the reliability and care that we provide. It's a relationship of trust that is more important than ever."

Incidentally, both JetBlue and Four Seasons won many new customers during these difficult times and emerged from the post 9/11 downturn and the last recession in good shape.

So if the US government defaults â€" and I sincerely hope it doesn't â€" it could be good for customer service. At least for some customers.

If nothing else, it will give corporate America a chance to show what it's made of. Is good service something you just deliver during good times? Or is it something you work even harder to deliver during difficult times, when your currency is going to hell in a hand basket and businesses all around you are defaulting on their loans?

I think we all know the right answer to those questions.


Christopher Elliott is a consumer advocate, syndicated columnist and curator of the On Your Side wiki. He's the author of the upcoming book Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals, which critics have called it "eye-opening" and "inspiring." You can follow Elliott on Twitter, Facebook or his personal blog, or email him directly.
Photo: willc2/Flickr