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Customer Service

Background

In the early days, the only way customers could have their questions or issues with purchases they made addressed was by traveling back to the seller’s location and having a one-on-one conversation. This may have meant a short walk to town or a longer trip, by horse even, across several towns or cities. Alexander Graham Bell’s invention of the telephone in 1876, and by the late 1890s, the introduction of the telephone switchboard, enabled people to contact businesses to discuss their products and resolve issues over the phone. This sped up the customer service process, saving customers and sellers valuable time and money. The rotary dial was widely used in telephones by the 1920s, which enabled callers to dial numbers themselves to connect to people, rather than having an operator connect them. This made conducting business and customer service over the telephone even more efficient and effective.

The Federal Trade Commission Act was signed into law by President Woodrow Wilson in 1914 to protect consumers and promote competition among various industries and businesses in the U.S. marketplace. The Federal Trade Commission (FTC) agency opened its headquarters in Washington, D.C., in 1915. The FTC investigates deceptive, unfair, and fraudulent business practices and sues companies and people who violate U.S. laws. The FTC helps to establish marketplace rules and provides education and information to consumers and businesses about their rights and responsibilities. This organization also collects consumers’ complaints about deceptive advertising, identity theft, violations of the National Do Not Call Registry, and other issues, and provides this information to law enforcement agencies to take follow-up action.  

Call centers emerged in the 1960s, when companies started to dedicate large offices with telephone workers to handle inbound and outbound phone calls. The inbound calls were from customers who had questions about products or issues with or complaints about their purchases. Outbound phone calls pertained to marketing, research, and sales calls to current and prospective customers and the general public. These call centers have evolved since then to become today’s customer service departments and centers. The market research group Statista reports that about 66 percent of these customer service centers are located in the United States.

The customer service process was further improved by the introduction of the 1-800 telephone number in the late 1960s. Customers could now call the company directly and toll free, without having to deal with an operator or calling collect. The 1-800 number has since made connecting customers with businesses a fast, cost-efficient method in the customer service business.

The next developments to enhance the customer service industry include interactive voice response (IVR) technology, computers, the Internet, social media, and mobile applications. Many companies in the U.S. started to embrace IVR technology in the 1970s and 1980s, and it is still part of the customer service industry today. IVR is an automated telephone and computer system that interacts with callers through voice and touch tone. Callers interact with pre-recorded messages and audio that directs them to the next steps based on the reason for their call.

The growth of computers and the Internet in the 1990s has since enabled businesses to connect with customers via Web sites, e-mail, and instant messaging. Social media sites such as Facebook, Twitter, Yelp, among others, have grown since the mid-2000s, creating another area of customer service to which companies allocate resources. Many companies now connect directly with customers who share their comments, favorable or otherwise, on these sites. Most recently, companies are also using dedicated mobile apps, such as Customer.guru., HubSpot, and Zendesk, among many others, for customer relationship management. These CRM mobile apps give customers another option to have their questions answered quickly and the apps also give companies another way to make sales and collect data about their customers.