Last week not only did shares in Dexcom get hammered after their earnings announcement the company is also taking a virtual beating on social media over their decision to transfer customer support functions to lower cost areas. While no one is favor of shipping jobs overseas this was a very necessary decision that had to be made. For these same people who are bitching about poor customer service also complain about the high cost of the products they use.
Frankly every diabetes device company is caught in this catch-22 situation how to provide low cost products which carry with them high customer support costs which cannot be passed onto the payor or patient. Back in the day when LifeScan was still part of JNJ we had the opportunity to visit one of their call centers and was astonished to learn the number of calls they got for what really is simple product. We always knew all the insulin pump companies had this problem but seriously how tough is it to use a glucose meter.
Customer support has become more complex now that all these way cool whiz bang devices are cloud enabled. Does this problem lie with the device, the app or the smartphone? As we have mentioned several times this is a huge issue for the mix and movement going on in diabetes, just who is responsible for what? The fact is customer support has become more not less complex as these devices have become “smarter”.
Listen no one should be on hold for hours on end when they call for support, this is totally inexcusable. However, and we know all the patient advocates don’t want to hear this but many of these calls could be avoided if the patient did a little work. Are we surprised that patients don’t read manuals or check out a company’s web site before calling? Not at all. But the fact does remain that many of these calls could easily be solved if they did.
Here’s another thing that patient advocates don’t want to hear, and device companies don’t want to talk publicly about, support is a COST not a REVENUE GENERATOR. Now one could argue that a good customer service experience generates greater sales, but they would be wrong. This may have been true 10 or 15 years ago, but it is not true today as payors hold the keys to the kingdom and payors want cheap.
It’s well known in the insulin pump community that Medtronic has the worst customer support. Social media is constantly filled with patients complaining about long hold times, no call backs or getting different stories each time they call. However, given their huge installed user base some of this is understandable. Pump support is like running an airline there are no days off it must be done 24 hours a day 365 days a year.
It should be pointed out that Medtronic and Abbott also have off-shore call centers as they like Dexcom are walking a delicate tightrope – how to provide quality customer support at a cost that doesn’t bankrupt the company. This is one reason and again we know people don’t want to hear this we have long advocated charging for support. While basic web or app-based support would be free we see nothing wrong with charging to talk with a human. To us this is just the diabetes device world catching up with everyone else. Heck when was the last time you went to a bank and actually spoke with a teller or dialed 0 on your phone and spoke with an operator.
The real problem here isn’t what the devices companies are doing. The real problem here what’s always been a problem here is that none of the patient advocates understand that DIABETES IS A BUSINESS. These people want cheaper insulins yet also complain the insulin’s we have aren’t good enough. Yet they don’t bother to ask why would any company would invest billions to develop better insulin’s when there is return on this investment. Lilly, Novo Nordisk and Sanofi are NOT charitable institutions they are in business to make a PROFIT.
The same is true for Dexcom, Abbott and Medtronic. Could customer support be improved, for sure. Would many of these calls be eliminated if patient training was improved, we think so. Would it help if the patient did just a little heavy lifting, no question. Is there anything wrong with charging for support, we don’t think so.
Listen we get that patients could care less that diabetes is a business all they want is their question answered and problem solved. We can’t blame them for bitching about excessively long hold times or not being called back. Yet it’s not like there are no other options for the patient either. How many of us have been on hold went to the web and found the answer while waiting on hold. How many of us have hung up and called a rep or the doctor’s office and got an answer.
Frankly we feel for every device company as they are being placed in a no-win situation. Payors are demanding lower cost options while customer service is a huge expense. Patients want low prices combined with on demand support without having to pay for this support.
Folks we didn’t create this environment, but it is what it is and ripping Dexcom over what was a wise and very necessary business decision to us is just foolish. As a Chicago Bears fan, we can understand your frustration as there is nothing better than blaming our field goal kicker for hitting the goalpost and costing us a playoff victory. When the fact is had the team played a better overall game this field goal attempt would not have been needed.
So go ahead and blame all the device companies they are easy targets but they did not create this situation they are just trying to deal with it the best they can and this isn’t easy.