We’ve all been told that bad customer service impacts the bottom line. But, does it? A recent article in USA Today (March 16, 2013) reported on the 9 worst retailers with the worst customer service https://usat.ly/Z5cy4P. The big surprise: several of them continued to increase their ROI even though they rated the lowest among retailers in customer satisfaction.
Here’s an excerpt from the article:
#4. CVS Caremark — health and personal care stores
• Customer satisfaction score: 75
• 12-month revenue: $123.13 billion
• One-yr. share price change: 15.95%
CVS Caremark (CVS) is one of the nation’s largest businesses in any industry, ranking 18th in the Fortune 500 for 2012. But its size has not brought the company the appreciation of customers. In each of the past three years, the company’s customer satisfaction rating has trailed those of rivals Rite Aid and Walgreens. However, not all customer service indicators reflect as negatively on the company. More than 75% of respondents to a MSN Money/JZ Analytics poll rated customer service at CVS Caremark stores as “excellent” or “good.” Investors might also rate the company’s stock well with shares up 15.6% in the last year.
How is it possible that a company can have poor customer satisfaction, yet high ROI?
Here’s what some people will glean from USA Today’s article’s survey data:
- Customer satisfaction data does not impact the bottom line.
- If volume is large enough (e.g. a chain of many stores) customer satisfaction becomes irrelevant.
I’m not a statistician, so it doesn’t make sense to me, for example, to give all 3,000 stores in a retail chain the same customer satisfaction rating. From my own personal experience, I’ve received GREAT service at my local Safeway, yet the company as a whole scored at the bottom of the list at #9.
In my opinion, the focus should be on the individual stores, not the sum total of all the stores. We also don’t know on what the judging criteria is based – What questions were asked? Are the questions appropriate for each individual site and for its specific customer demographics?
Another point to consider is that perhaps we, as consumers, are simply lowering the bar on what constitutes great customer service. Bad customer service is so ubiquitous that our expectations are extremely low to the point that even dismal customer service can seem like fantastic treatment.
Real World Story
One of my coaching clients told me the following story:
“At my local grocery store, it’s difficult to find any clerks willing to help me find items. The other day, I was looking for precooked pasta for a new lasagna recipe. After searching the store from top to bottom, I finally found a clerk. Before I could finish asking where I could find the precooked lasagna pasta, the clerk pointed to the other side of the store and said, “Aisle 9.” He then quickly walked away, probably afraid that I’d ask him another question. At the time, I thought, “What a nice young man. He actually took the time to help out me, even though he looks busy.”’
Let’s look at this story. What about this experience was she so happy about? The experience was dismal at best. Her expectations for this local grocery store were so low that this recent experience seemed like great customer service in comparison. And how would she rate her experience on a customer satisfaction survey?
Strategies that Turn it Around:
- Use customer satisfaction data as one of many tools to gain information about your products or service.
- When comparing your data to others in your market, make sure you’re comparing apples to apples.
- Make sure your surveys are specific to your customer demographics: location, culture, housing, income, employment, etc.
- If you want a deeper understanding about your data results, ask your customers. And truly listen to their responses. Focus groups comprised of your customers may help you greatly in this regard. Remember, your loyal customers are on your side and want you to succeed.
Remember: Customer satisfaction data is an important tool — only one of many — that may need to be sharpened and upgraded for each location and customer base.
What do YOU think of the statistical data presented in USA Today’s article? Please share your insights below.