The Impact of Poor Customer Service
Do companies with higher satisfaction ratings enjoy higher sales volume and a more stable cash flow? Yes, according to author Claes Fornell, Director of the American Customer Satisfaction Index. Fornell’s extensive research on the subject (”Customer Satisfaction and Stock Prices: High Returns, Low Risk)” proves customer satisfaction impacts individual organizations and the economy’s future health. Top ACSI companies—those companies who highly value customer satisfaction– regularly outperformed the market considerably.
How Significant Is Superior Customer Service?
Several studies compared top ACSI companies against the market, measuring stock performance from 1997 to 2003 and other data. The results were amazing:
”The top customer satisfaction companies beat the Dow Jones by 93%, S&P 500 by 201%, and NASDAQ by 335%.”*
Customer satisfaction pays off even when stock market value dropped. Companies with highly satisfied customers seem insulated from dropping stock prices.
Improving your customer service can have far-reaching effects in:
repeat business
lower price elasticity
higher prices
more cross-selling opportunities
greater marketing efficiency
Higher customer satisfaction also positively impacts:
• employee loyalty
• cost competitiveness
• profitable performance
• long-term growth
*John Dijulius, author of Secret Service: Hidden Systems that Deliver Unforgettable Customer Service