Why Service Stands Out at the Top 10 U.S. Firms

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Many businesses view customer service as an unnecessary and burdensome cost.

Why answer the phone with a real person when a disembodied robotic voice can do the same more cheaply? Why staff counters for speedy checkout when fewer cashiers means thicker profit? And why offer liberal return policies? You bought it, sucker. Now live with it.

These practices, seemingly more and more common, infuriate consumers.

But there are businesses that have stood against the tide, continuing to work hard to deliver good service. And there is evidence consumers notice, appreciate and reward those that still make the effort.

In a recent survey by the National Retail Foundation and American Express, 9,200 shoppers were asked to name the retailers providing the best service.

Ten winners were chosen, with first place going to online shoe and apparel retailer Zappos.com. Department stores J.C. Penney and Nordstrom, catalog sellers Lands’ End and L.L. Bean, and online sellers Amazon.com, Overstock.com, and Newegg were among the other winners.

Attitude Matters

What do these winners have in common? Attitude, for one thing.

When questioned by IBD, most outlined policies that view service as a cost-effective path to customer loyalty. "It’s an investment for us. It’s not a cost," said Rob Siefker, director of customer loyalty at Zappos, which is owned by Amazon.

Siefker says 75% of Zappos customers on any given day are repeat customers. "We are building that trust," he said. "We’re building that relationship. And that’s because we’ve put a stress on good service."

J.C. Penney polls its customers on their shopping satisfaction. Shoppers who say they are "highly satisfied" shop at J.C. Penney 20% more often and spend 13% more, says Executive Vice President Mike Theilmann. The chain has introduced bonus systems that reward store managers and workers for improving customer satisfaction.

David Van Amburg is manager of the American Customer Satisfaction Index, which grades companies within a broad range of industries yearly. "There is a direct correlation between customer satisfaction – with service quality a big component of that – and customer loyalty," Van Amburg said. "Companies that do an outstanding job at satisfying customers typically outperform competitors in the market."

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