My Three Cents

What roles do customer satisfaction and loyalty play in boosting a company’s bottom line? 

One would think the answer is “a very central role.”  But, according to a recent study published in, we find that’s not always the case.

The American Customer Satisfaction Index (ACSI) — the only national cross-industry benchmark of customer satisfaction in the US — scored nearly 200 major American brands and then compared their 2013 stock market returns with the customer-satisfaction rankings of the publicly traded companies. 

The comparisons yielded some surprising conclusions:

1.      Customer-service scores have no relevance to stock market returns.

2.      In fact, the most-hated companies actually perform better than their beloved peers.

So does that mean you can have a bad experience and still be willing to patronize a company?  The answer is yes.  Competition, in my opinion, is the key that turns the lock.

So this is my gut rationale. The fewer the competitors, the less customer satisfaction matters. Choices are limited in the utility, telephone, and internet provider sectors, for example, and sometimes even in the physicians who take your insurance. 

In contrast, your options are legion when it comes to supermarkets, shoes, clothing, artisanal beer, vegetables and restaurants, for example.  Customer service and product quality are all they have to sell.  One bad experience with the product and you are done.  Think of the poor restaurant that you have patronized for years and suddenly one of your favorite dishes just doesn’t taste right.  I conducted an informal poll of acquaintances that suggests most people won’t ever go back. 

So, I ask you, what kind of incentive do these companies need to have to please customers if the bottom line or stock price are not affected by poor service?

thought leadership


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