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$4 Billion Acquisition, Lousy Service and Burning Millions on Advertising

I developed Feelings, the first customer service program ever developed and released it in January 1980. This was before many of my current readers were born. My reasoning was I witnessing firms (in 1979) spending fortunes on marketing and advertising and then, as the customer walked in the front door, the employees would literally smack the customer on the head with a baseball bat with their terrible customer service.

So, pretty hard to believe that 38 years later and with everyone claiming they have the world’s best customer service…the exact same thing is happening today.

Here’s an example of what we recently experienced:  My wife and I had 3 stock accounts at Scottrade. An awesome customer driven firm. The bad news is TD Ameritrade, owned by TD Bank out of Canada, had acquired Scottrade and completed the merger in March. TD Ameritirade is now spending millions of dollars each week on advertising. The problem is their customer service sucks at all levels. It gets worse each day with each transaction. 

Spending $4 billion dollars to acquire a customer driven firm and then destroy what you bought is really stupid.

2007 TD Bank bought Commerce Bank, America’s Most Convenient Bank for $8.5 billion. Hill told me within 12 months after he sold the bank to TD Bank that “It is now a bank” In my seminars all over the world I would call Commerce Bank and they would answer the phone in 1-2 rings with a live person. If you call them today 1-888-751-9000 it has an IVR system. NO live person. After you push the numbers it will be 25 minutes before a live person answers. I just tried. They went from heaven to hell. I asked why it takes over 25 minutes and the girl said I apologize. Typical American approach. Give poor customer service and then simply offer an apology. 

Vernon Hill told me it starts with a thousand cuts. TD Bank has changed Commerce Bank. They no longer have free coin counting machines at each location. While Vernon Hill was CEO of Commerce Bank, banks were spending billions to acquire competitors and within a year Commerce Bank grew and the firms who made the acquisitions lost most of their new customers to Commerce Bank. (On July 29, 2010 Vernon Hill started a new bank in London called Metro Bank. In the March issue I shared their financial results.)

TD Bank is the same firm that runs TD Ameritrade. I have had one account with TD Ameritrade I opened  in 2003 and have never made a trade since then. It has the 9 service leaders that I invested in. No matter how mad I get at TD Ameritrade I cannot close this account.

We had 3 accounts at Scottrade that were transferred to TD Ameritrade. All were moved in March to Schwab. Luke, my son-in-law wanted to buy some Alibaba stock from China which is listed on the New York Stock exchange. He transferred the money to me and I opened an account at TD Ameritrade for my daughter online. She is a US citizen he is UK so has to be in her name. They both live in China. When he wanted to buy some more stock it was our first customer interaction with TD Ameritrade in the Edina Minnesota office. About 2 miles from my home. I have driven by it hundreds of times.

My wife went to the small office to drop off a check to put in my daughter’s account she waited about 25 minutes. No one waited on her so she left. She returned a few hours later with one of her puppies and then they waited on her. I called to complain to a supervisor in their call center about the poor service. The Edina branch manager called me to apologize. NO service recovery.

Luke contacted me again and wanted to invest more money in Alibaba stock and asked me to lend him the money until he could transfer some money  to me. The stock price was climbing each day so Luke was pushing me to move fast. My wife again dropped off another check from me at the Edina office. The deposit never showed up. I called TD Amertirade on a Friday to ask where the deposit was. They said they could NOT talk to me since I was not on the account.  I filled out the online account and knew I was.  They looked more closely and found out I was but they said it would take a few more days for them to set me up with access. I guess it takes them several months to handle the online paper work. Great speed. Then Luke calls and then tell him the deposit was not made because the year on the check said 2013 not 2018. (I looked at the copy and the 8 was hard to read) The girl who accepted the check should have looked at it. 

On Monday morning I opened an online account at Schwab for my daughter. Later that day I deposited another check for the same amount because Luke was told they did not accept the first check.  On Wednesday he calls me to say the money is in his TD Ameritrade account which means I made double payments. He called TD Ameritrade and was told I could pick up a check after 12 PM. When I got there about 12:30 PM there was NO check. They lied. I was also told I had no access. They lied. The Branch Manager came out and said they would mail me the check that day. She lied. As I stated in our last newsletter…Don’t lie. Ever. End of story. Lies not only damage your ability to communicate with customers, it can also result in a complete communication breakdown that is difficult – or even impossible – to repair.

I had mailed the Edina branch manager a letter saying I was closing all my accounts. When you pay $4 billion for a firm you have so much money I guess you really do not care.

Lessons to Learn:

  1. Have a call center 24/7 that answers the phone in 1-2 rings with a live person. (I have NO idea how Commerce Bank can go from 1 second to over 25 minutes with TD Bank)
  2. Don’t buy a Service Leader and pay for that brand and then destroy your brand with lousy service
  3. Learn to tell the truth. A major obstacle with TD Ameritrade. In the March newsletter I talked about lying. A common American habit.
  4. Perform. Do what you say you are going to do.
  5. Treat every customer special. I have NO idea why you would have a nice office and not wait on customers. Really stupid.
  6. Master Service Recovery. When a customer is mad you have 2 choices.
    1. Say good bye.
    2. Master Service Recovery.
  7. Take 10 percent of your adverting budget and use it to train your staff on great service.
  8. Master speed.

“A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.” ~ Mahatma Gandhi

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