Value Erosion by Cost-Cutting

Cost-cutting measures can lead to a gradual disconnection between a brand and its customers, often referred to as 'brain death by a thousand cuts.' As companies focus on short-term financial gains, they risk alienating customers who no longer feel valued. By the time businesses recognize this detachment, it is usually too late to reverse the damage. A clear distinction exists between service-focused and cost-focused businesses: service-oriented companies empower their customer service representatives to proactively reach out and resolve issues, while cost-driven companies limit staff to handle only incoming calls, resulting in inconsistency and frustration for customers.