your choices..

What if the norm in the business world was good customer service? What if whenever you had a problem with a company’s product or service, you could just contact someone, and a live human being who was knowledgeable and skilled enough to solve your problem would immediately respond?

I’m sure you’re probably laughing right now at the absurdity of my scenario, because it seems so … science-fictiony. The norm today seems to be either poor customer service, or difficult customer service (push 1 for this, wait on hold, push 17 for that, wait on hold…).

The interesting thing about this situation, though, is that it creates enormous opportunity for those companies that are willing to significantly improve their customer service. By doing so, they can stand out among their competition and win more business.

Some companies are already aiming high in this department: According to the 2007 Customer Service Survey conducted for the National Retail Federation and American Express by BIGresearch, L.L. Bean took top honors last year, moving up from third place in 2006. It was followed by, and Land’s End, a unit of Sears Holdings, was ranked No. 6, while Nordstrom took eighth place.

It’s interesting that Sears is not on the list. Since it has a subsidiary that seems to do customer service well, it’s staring at a great opportunity to transfer some knowledge and processes from one unit to the parent company.

We at the Fool have also been paying attention to customer service, and in our 2007 Fool Awards, Nordstrom beat out the competition (which included other impressive servers such as, Netflix and CarMax, among others).

Good customer service can only help a company in our current environment. I suspect it has something to do with Amazon’s 75 percent revenue growth over the past two years and Netflix’s customer retention.

What else could happen
Of course, if more and more companies started offering outstanding customer service, and it became the norm, there could be a downside for business: The loss of a useful competitive edge. Companies will still be paying for the service they provide, but it won’t be rewarding them as much.

Until that unlikely scenario occurs, though, there’s much room for improvement and rewards.



One Response to “your choices..”

  1. jimpins Says:

    The economy’s in the tank. Corporate profits are down. Business owners are having just as hard a time getting loans as wannabe homeowners.

    So you’d think that businesses would be treating their patrons like royalty, right? That this would be exactly the right time for businesses to coddle their customers?

    Wrong. When the economic going gets tough, some companies apparently get tough-minded about customer service, squeezing out the last dime of profit by cutting back on critical customer-facing positions such as phone personnel.

    “We’ve seen a fall in customer service as we’ve gone into a recession,” said Richard D. Hanks, the president of Mindshare Technologies, a customer-service consulting company. “As the cost cutting occurs . . . they start to cut the wrong things.”

    That reality is borne out in the results of MSN Money’s second annual Customer Service Hall of Shame, a ranking of companies with the worst customer service, based on a nationwide survey commissioned by MSN Money and conducted by Zogby International. The scores for our Hall of Shame companies are down from a year ago.
    And the ‘winner’ is . . .
    The company at the bottom of the customer-service heap is Time Warner’s AOL. A remarkable 47% of people who had an opinion of AOL’s customer service said it was “poor.” Analysts said that rating may have something to do with its effort to transition from an Internet service provider — where it still has more than 9.3 million paying subscribers — to an ad-supported Web portal.”I don’t know what to attribute that to,” AOL spokeswoman Dori Salcido said. “I just do know that we continue to improve customer service; that’s sort of our goal.”

    AOL fits squarely in the category of company that dominates our list: communications companies and banks that provide complex and at times highly technical products. Tens of millions of customers rely on those products almost hourly. And, should something go wrong, those customers get anxious and demand a fix — now.

    That’s still no excuse, analysts say. In their zest for quarterly profits, these companies tend to favor acquisitions over beefed-up service staffs. They also lean toward confusing fees over straightforward price increases — strategies that don’t play well for the long haul.
    “Most of these companies actually aren’t thriving,” said Michael Shames, the executive director of the Utility Consumers’ Action Network, a California nonprofit that monitors business practices. People don’t look at companies with poor customer-service scores and say, “Here’s where I should invest,” he said.

    For the survey, conducted online in March, Zogby asked more than 7,000 people across the country to rate their customer experiences with 140 leading companies in 14 industries, including airlines, hotels, insurance companies and big-box stores such as Wal-Mart. Respondents could answer “excellent,” “good,” “fair,” “poor,” “not familiar” or “not sure.”

    The companies in the Hall of Shame were ranked by the percentage of people familiar with a company who answered “poor.”

    Although AOL didn’t get ranked last year, corporate sibling Time Warner Cable did, and it made the top 10 then and now, receiving a 29% and 31% “poor” response, respectively. Time Warner Cable was one of four companies — along with Comcast, Sprint Nextel and Bank of America — to make a repeat showing.

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