From my business world the four steps to customer service hell are:

1. Actually care about service
2. Care about the service, but make sure the client finds it difficult to get hold of anyone
3. Stop caring but still pretend to care about service while making the T&Cs so onerous clients get put off using the service &
4. Give up pretending to care, and shove the prices up until the pips squeak

It is between 3 & 4 when customer service starts to become superfluous because the clients are already walking