Monday, August 5, 2019

CEO Daily: The Dark Side of Customer Service

Our daily brief on must-read business news…and more.

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August 5, 2019

Good morning.


"Customer focused, data driven" has become something of a mantra for modern business. Ubiquitous data, natural language processing, machine learning and social media have all combined to make it possible for companies to know far more about their customers than ever before, and to act instantly on that knowledge.


In theory, these technologies should also give companies the ability to delight customers more than ever. But in fact, as a story in this weekend's Wall Street Journal illustrates, the result can be very different. Some companies are using their new superpowers not to please customers, but to manipulate them.


The article notes companies are beginning to use "call cen­ters with soft­ware that an­a­lyzes a call­er's tone of voice and pace of speech to de­ter­mine how up­set the per­son is. An­grier callers get routed to agents skilled at de-es­ca­lat­ing con­flict." One company cited in the story—Afiniti Inc.—"crunches data gleaned from con­sumers' de­mo­graphic pro­files, credit scores and past in­ter­ac­tions with a com­pany to de­ter­mine which cus­tomer-ser­vice agent is the best fit. An al­go­rithm then matches the caller to the agent who has had the most suc­cess with that type of caller."


The end result is, among other things, a newly sophisticated understanding of the customer's "break point." "Companies crunch data and use artificial intelligence to determine exactly how angry a customer has to be to bolt. Many are walking right up to that line." This can lead to not better customer service, but worse.


If you missed the story, it's worth reading here. Other news below.


Alan Murray

alan.murray@fortune.com

@alansmurray


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TOP NEWS


China's Currency Is Sinking


The mainland Chinese renminbi sunk to its lowest point relative to the dollar in more than a decade, as the U.S.-China trade war mounted. The currency surpassed 7 to the dollar—a psychologically important threshold that hasn't been passed since around the time of the financial crisis. The currency is also a flashpoint between China and President Trump, who has frequently criticized China's weakening of its currency to help its exports. New York Times


Iran Seizes Another Ship


Iranian Revolutionary Guards seized another oil tanker on Sunday, the latest in a series of seizures that have contributed to mounting tensions, particularly in the narrow Strait of Hormuz. The vessel was Iraqi, according to reports, and Iranian media said it was smuggling fuel. In July, Iran seized a British tanker for alleged marine violations, two weeks after U.K. forces seized an Iranian oil tanker near Gibraltar. Reuters


HSBC Ouster   


After just 18 months, HSBC's chief executive is out. The Monday announcement came as a surprise, with the chairman of the bank saying a change was needed, but executives said that there was no warning that CEO John Flint was headed for the exit. The bank, like many of its competitors, has been struggling with waning growth and the impact of the U.S.-China trade war, and has faced questions about why it hasn't produced higher returns given its focus on emerging markets. Fortune


Hong Kong Goes on Strike 


Flights were canceled and transit disrupted across Hong Kong on Monday, as a protestor-led strike gained force after a weekend of disruptions and tear-gassing from police. That follows comments by Carrie Lam that Hong Kong was becoming dangerous, condemning the protests that have expanded from protesting extradition laws to protesting mainland China's increasing grip on the island. WSJ



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Content From Deloitte

Rethinking Recognition 


Most people want to be recognized for their good work, but it may not be in the ways leaders think. The Practical Magic of Thank You, a new study by Deloitte, outlines how employees want to be recognized and for what.  


Read more


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AROUND THE WATER COOLER


Berkshire Hathaway's Cash Pile


Warren Buffett's business now has $122 billion in cash—a fresh record, driven by a rising U.S. stock market. That also meant that investors were waiting for Buffett to make a big acquisition—the $10 billion stake to help oil company Occidental take over Anadarko appears to have barely made a dent. But there were signs of slowing growth in Berkshire's portfolio, too, after a mixed earnings season, including from industrial goods manufacturers and rail operators. FT


Is Morale Sinking at the New York Fed? 


Internal dramas appear to be playing out on an unusually public stage at the Federal Reserve Bank of New York, after the sudden departure of two longtime and well respected officials. That came around the time of public comments by chair John Williams, which raised expectations of an aggressive rate cut by the Federal Reserve. Bloomberg


Shut 8chan Down 


The website, formed as a more unmoderated alternative to 4chan, has links with a rising number of mass shootings—including the El Paso shooting this weekend—offering a sounding board and meeting place for violent and extreme views. Critics are trying to get cloud services to cut the website off, and its founder says it should be shut down. "It's not doing the world any good. It's a complete negative to everybody except the users that are there. And you know what? It's a negative to them, too. They just don't realize it," he said. Web firm Cloudflare pulled its support of the site this morning. New York Times


The Fringe Festival Hedges Its Bets 


Fears of a no-deal Brexit have bludgeoned the pound—and Edinburgh's world famous Fringe Festival is feeling the impact. The festival's director said visiting artists are being paid in dollars or euros, and that to limit volatility, organizers hedged most of its currency dealings more than half a year ago. The three-week summer arts and comedy festival will bring together 2,800 artists from 41 countries. FT


This edition of CEO Daily was edited by Katherine Dunn. Find previous editions here, and sign up for other Fortune newsletters here.


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