• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia
LeadershipBusiness models

Customer Disservice Is the World’s Hot New Business Model

By
Jeffrey Pfeffer
Jeffrey Pfeffer
Down Arrow Button Icon
By
Jeffrey Pfeffer
Jeffrey Pfeffer
Down Arrow Button Icon
September 11, 2016, 5:30 PM ET
As Long Lines In Airports Rise, TSA Struggles To Cut Waiting Times
Photograph by Scott Olson — Getty Images

In May, a senior executive at the IATA (that’s the international airline association) told me that the British government had reneged on commitments made to airlines to provide a sufficient number of customs agents to avoid hour-long or longer waits at Heathrow. Not long after, as the summer heated up, the airport’s infernal passport queues were described as being “at a crisis point,” which may explain why Heathrow regularly receives miserable passenger reviews.

But behind every customer service crisis there apparently lurks an opportunity to make money. My IATA colleague had forewarned me that the British government was going to use the crisis at passport control as an opportunity to collect revenue from inconvenienced passengers hoping to avoid the (government-induced) inconvenience.

And it was so.

Not long after my wife and I suffered through long lines even at fast track entrances, we each received an e-mail inviting us to apply for the British governments’ special registered traveler service. For the tidy sum of 70 British pounds (about $93), that program gives you a one-year pass to use machines to jump the customs line if your passport has a chip in it, and the privilege of using the U.K./EU lines and not filling out a landing card if machines aren’t available or your passport is not chip-equipped. After that first year, you can renew by paying 50 pounds more for another 12 months.

Then there are the airlines themselves. Having made the coach travel experience as unpleasant as possible, they now use the flight booking process to bombard you with offers for all the accoutrements—for a fee, of course—that might bring flying back to what it used to be before airlines charged for checking bags and food and put you in seats sized for eight-year-olds. So they sell seat locations with slightly more knee room, and airline-branded credit cards that permit you to check your first bag for “free”—that is, if the cards (which typically charge $95 after the introductory year) can be considered “free.” And, yes, if one of your extra fees brings with it priority boarding, you might find a place for your carry-on bag somewhere near you.

See also: Here’s the Latest Cloud Startup Seeking to Fix Customer Service

As was nicely detailed in a lament on ever-worsening tech support published in the New York Times earlier this summer— appropriately titled “Why Tech Support Is (Purposely) Unbearable”—92% of customer service managers surveyed knew that their agents could be more effective and 74% could detail precisely how the company prevented the tech support people from providing decent tech support.

There’s a financial reason for this bad customer support too, of course. Customers’ frustrations offer yet another opportunity for companies to make money. While callers wait endlessly on hold, listening to music and the ridiculous mantra of “Your call is very important to us” (which it surely is not, or someone would have answered the call), companies push other products and services—including, of course, the opportunity to purchase “premium” tech support and get out of the endless wait on the phone.

 

I suppose I can’t object to apps such as FastCustomer, LucyPhone, Hold-Free, and Holdr, companies that are in the business of letting you bypass endless phone wait times by waiting for you and calling you when a human being is actually ready to talk. Or to services like Flight-delayed.co.uk, which, for 25% of funds recovered, fights on your behalf with airlines to recover compensation for flight delays that exceed the regulated maximums (Oh, Europe, where travelers receive actual compensation for flight delays; That policy in the U.S. would put United out of business). These are companies filling a real need created by service providers that don’t provide service.

But when the service providers not providing the service then expect you to pay more to get the service they are not providing, that strikes me as fundamentally unfair. At the end of the day, it’s a question of competition—or lack thereof. As Kate Murphy noted in the New York Times piece, a business model that rewards its own incompetence by charging users to escape the service malfeasance is only possible in sectors where competition has been so eviscerated that people have almost no choice.

 

Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University and the author of Leadership BS: Fixing Workplaces and Careers One Truth at a Time.

About the Author
By Jeffrey Pfeffer
See full bioRight Arrow Button Icon

Latest in Leadership

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • Future 50
  • World’s Most Admired Companies
  • See All Rankings
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
About Us
  • About Us
  • Editorial Calendar
  • Press Center
  • Work At Fortune
  • Diversity And Inclusion
  • Terms And Conditions
  • Site Map
Fortune Secondary Logo
  • About Us
  • Editorial Calendar
  • Press Center
  • Work At Fortune
  • Diversity And Inclusion
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Leadership

Future of Workthe future of work
Have good taste? It may just get you a job during the AI jobs apocalypse, says Sam Altman
By Marco Quiroz-GutierrezFebruary 27, 2026
5 hours ago
C-SuiteFortune 500 Power Moves
Fortune 500 Power Moves: Which executives gained and lost power this week
By Fortune EditorsFebruary 27, 2026
6 hours ago
Successphilanthropy
Dolly Parton’s philanthropy inspiration is her father who couldn’t read or write: ‘I saw how crippling that could be’
By Sydney LakeFebruary 27, 2026
9 hours ago
Personal Financewealth management
The Great Wealth Transfer is already happening as millennials hitting their ‘Peak 35’ are richer than ever
By Catherina GioinoFebruary 27, 2026
9 hours ago
jack dorsey
AILayoffs
Block CEO Jack Dorsey lays off nearly half of his staff because of AI and predicts most companies will make similar cuts in the next year
By Jake AngeloFebruary 27, 2026
10 hours ago
Spencer Rascoff, chief executive officer of Match Group Inc
SuccessGen Z
CEO of the tech company behind Hinge and Tinder set up an employee hotline where staff can DM him anytime: ‘No hierarchy. No filters. Just real input.’
By Emma BurleighFebruary 27, 2026
12 hours ago

Most Popular

placeholder alt text
Innovation
An MIT roboticist who cofounded bankrupt robot vacuum maker iRobot says Elon Musk’s vision of humanoid robot assistants is ‘pure fantasy thinking’
By Marco Quiroz-GutierrezFebruary 25, 2026
2 days ago
placeholder alt text
Success
Jeff Bezos says being lazy, not working hard, is the root of anxiety: ‘The stress goes away the second I take that first step’
By Sydney LakeFebruary 25, 2026
2 days ago
placeholder alt text
Commentary
'The Pitt': a masterclass display of DEI in action 
By Robert RabenFebruary 26, 2026
2 days ago
placeholder alt text
Economy
It’s more than George Clooney moving to France: America is becoming the ‘uncool’ country that people want to move away from
By Nick LichtenbergFebruary 27, 2026
20 hours ago
placeholder alt text
Success
Gen Z Olympic champion Eileen Gu says she rewires her brain daily to be more successful—and multimillionaire founder Arianna Huffington says it really does work
By Orianna Rosa RoyleFebruary 25, 2026
3 days ago
placeholder alt text
Law
China's government intervenes to show Michigan scientists were carrying worms, not biological materials
By Ed White and The Associated PressFebruary 26, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.