But if there was a profitable model where they offer great customer service wouldn't they? Or at least a competitor would come in who did. I don't believe spotify is making millions or billions in pure profit. Their competitors are able to position their products as loss leaders.
I agree some companies could do much better, Google is a massive example, but you still have to remember the scale. Read somewhere, If 0.1% of your users require customer service per day, and it takes 10 minutes per user, you'd need ~21k people working 8/hours to handle it each day.
> you'd need ~21k people working 8/hours to handle it each day.
That's Google's problem with their business model, not the customers'.
The customer, who has by definition purchased rights to the service in question (whether with the currency of their attention, their information, or their money), deserves the attention of a human - with the ability to fix problems that arise - when they have a problem with that service that the company's self-service or automated help can not solve.
A customer doesn't have a right to the attention of a human, at least in the US. It's your choice as a consumer to use googles services or not. Well almost, some you can't get away from which kinda makes more sense towards legislation.
Ok, let's use your numbers. 0.1% of days is one service call every 3 years on average, seems reasonable but 10 min may be a bit low. So lets double it.
20 min of a fully loaded 50k employee is about 8 dollars to the company. Or about 2% of a $10 subscription. And that's when I've been pretty generous.
Margins may be so tight this isn't possible, sure; but it isn't obvious. Also note is is hugely higher level of service that what is currently offered, surely there is an in between that is affordable?
Or did I miss something with this back-of-envelope?
> But if there was a profitable model where they offer great customer service wouldn't they? Or at least a competitor would come in who did.
They wouldn't offer great customer service, they'll offer what they feel they can get away with. And there were competitors but they were pushed out (remember RDIO?, good times).
Yeah. Companies tend to think "why get some of the profits when I can cut corners and get all of the profits". Especially when the corners aren't mandated by law (and even sometimes when the cut corners are mandated by law).
Because Spotify had an ad-supported free service based on selling data and paying the bare minimum it could get away with to artists, while RDIO had a subscription-only service for a long time focused on music recommendations from friends. Spotify squeezed RDIO with its free tier and monetized its user data. After a fruitless trip into online radio, RDIO were bought out by Pandora.
I know of many people wishing to use or own a business like spotify. The barrier to entry is very high. Agreements with record companies being the biggest hurdle.
Without competitors, giving you any customer service is unnecessary if demand for the product is high.
Spotify is not making billions in pure profit... their 2020 forecast was between 150 to 250 million euro in profit... which means if they had to spend $2 euro per customer per year on customer service, they suddenly have less than zero profit.
But their profit/cost ratios are high enough to offer more customer service than they currently are.
And ultimately, it's not the customer's fault that the business is not working from a sustainable business model.