Worth the Trouble?

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Worth the Trouble?
Holding Line on Customer Service: Michael Schneider at the Beverly Hills headquarters of Service Technologies.

Of all the unpleasant tasks ever-willing tech companies take on for consumers, Michael Schneider might have tapped into one of the most onerous.

Forget walking your dog, doing your laundry or moving your stuff from your ex’s place. Schneider’s Service Technologies Inc. deals with customer service issues, using an algorithm and a human touch to get refunds, track down lost items and otherwise deal with time-consuming, often-frustrating interactions that can suck time and energy from even the most patient consumer.

“You are seeing a number of services … that allow consumers to outsource the waiting and time-consuming aspects of certain day-to-day tasks in order to free up that precious time for consumers to focus on more important tasks in life,” Dan Chen, managing director of Santa Monica’s Siemer & Associates, a boutique merchant bank that serves the tech community, said in an email.

So how does Service accomplish so quickly what it takes everyone else so long to do?

“Really, really smart software. We are not just a call center,” said Schneider, who declined to go into more detail other than to say the platform operated by his seven-person company is far more efficient than going it alone.

Depending on the situation, customers submit pertinent information such as a customer identification or product number as well as supporting documents such as a proof of purchase or previous correspondence with the company. All information is then encrypted, said Schneider, who added that the company never stores sensitive information such as credit card or Social Security numbers in plain text. Once contact is made with the vendor, a Service employee informs the representative they are assisting a customer in resolving a complaint. So far, companies have been willing to work with them.

One happy customer is Michael Jones, chief executive of Santa Monica’s Science Inc., who turned to the 2-month old Beverly Hills company to help get his money back after a bad experience with an airline.

“The most powerful services people can produce for me are things that save my time,” said Jones, who formerly served as chief executive of social media platform Myspace.

Service is seeking a foothold in a crowded corner of the tech industry. While a number of on-demand, task-oriented firms have entered the market, venture capital firms haven’t slowed down funding, looking for the next unicorn that will spread like wildfire among users desperate to simplify their lives.

In that category, Service joins local companies such as on-demand laundry and dry-cleaning service Washio; dog-walking service Wag; and Clutter, which boxes, stores and tracks peoples’ extra stuff.

Service passed the 500-customer mark last week, Schneider said, and it is generating about 100 new users a week. He envisions the firm’s process becoming more automated as its customer base grows into the thousands and beyond. Still, a machine can’t negotiate a resolution with a company on its own, so he doesn’t foresee a time when either he or one of his employees is removed from the equation.

“We’re a tech company with real humans,” he said, adding that Service has already returned tens of thousands of dollars.

While Schneider wouldn’t disclose exactly how the software works or what specific function it performs, it improves with each new customer, said Paige Craig, a general partner at West Hollywood’s Arena Ventures who has invested in Service.

As Service establishes the best contacts at a particular company and acquires data about how each business handles the resolution process, things become more efficient. What may take 20 minutes the first time around with a vendor might take 10 the next, and so on, Craig explained. And if Service knows an airline gave a $500 refund in response to a specific complaint, that sets a benchmark to guide subsequent claims.

In Jones’ case, within five hours Schneider and his resolution team, consisting of one full-time staffer and a paid intern operating out of a co-working facility, were able to get him four vouchers he could use to purchase other flights. To top it all off, it didn’t cost Jones a penny because Service is free to use.

A no-cost service might be appealing to consumers, but a no-revenue model is not sustainable. While Service isn’t charging now, Schneider said he’s not concerned with figuring out how to monetize his company just yet.

“It’s way too early to speculate,” said Schneider. “We are saving people time and also helping businesses protect their brand. There are a lot of options.”

Craig said the company is still figuring out the best way to approach its revenue model, but potential options include a flat fee, a percentage of each claim or even a monthly membership.

One model might be seen in competitor AirHelp.

The New York company uses software to help consumers get refunds on delayed, canceled or overbooked flights in exchange for a 25 percent cut.

Other than that, Craig pointed to scale.

“There’s a true network effect where every new person that comes into the business adds value,” he said. “Over time it becomes very powerful.”

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