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Great Customer Service Equals Profits, Survey Says. The following article was published in the "Executive Report on Customer Retention." According to a just-released survey of top executives, managers and business owners, companies that report highest profits consistently emphasize customer service as a key business strategy. Every company that responded to the survey that ranked in the A category of profits also cited high commitment to great customer service. In contrast, customer service was rated highly in strategic importance by only 65% of respondents ten years ago when the "Business Outlook Survey" first began. Moreover, this time around not one company responding to the survey ranked customer service as "unimportant" to strategic development. "Everyone in today's business environment seems to see customer service as a key element of success," says Brad Hosmer, President of The Beta Consulting Group, Concord New Hampshire, which conducted the survey and specializes in guiding companies toward improved sales, marketing and new business development. "Companies are apparently now viewing customer service as a distinct competitive advantage in the present-day's marketplace as well as for the foreseeable future." The survey questioned presidents, CEOs, owners, and other top executives at 139 companies in the manufacturing and service industries spread throughout the US. Of the 75 actual respondents, most were concentrated east of the Mississippi. The complete survey results included: - All responding companies reporting high profits placed customer service in the survey's A bracket as a key business strategy. - Of those who reported 1999 profits in the survey's B ranking of profits, 70% rated customer service as either an A or B level strategy. - No company responding rated customer service below the survey's C level as a business strategy. This finding could not be said for any of the other surveyed categories, such as aggressive selling, cost reduction, e-commerce or innovative marketing. - Fully 80% of those surveyed rated customer service at least as a B level strategy, if not an A. The survey also found that 64% of those companies expecting profits at the A level in the coming year (2000) also rated customer service an A. Those companies expecting profits at the B level in 2000 rated customer service an A only 45% of the time. Finally, companies expecting profits in 2000 at the C level placed customer service as an A strategy only 35% of the time. "It certainly looks like there's a strong correlation between high emphasis on customer service and expected profit results for next year," Hosmer commented on this aspect of the survey's findings. Hosmer's Business Outlook Survey has been conducted for 10 consecutive years, the first time in 1990. In the initial survey, customer service was ranked in the A or B by only 65% of the respondents. During the past two years, however, it's attained A or B ratings from 94% in 1998 of respondents and 79% in 1999. Over the full period of conducting the survey, customer service has trended steadily upward as a key corporate strategy when based upon combined A/B ratings. "This means customer service is obviously a strategy that companies responding to this survey more and more believe in," Hosmer observed. "It's a key core strategy for most companies that seems to make a definite difference to them. The lesson I see is: you better practice excellent customer service if you want to prosper and you also better practice it because your competitors probably are doing so with vigor." Bradley E. Hosmer, CMC, heads The Beta Consulting Group in Concord, NH, specializing in improved sales, marketing and new business development for generating profitable growth. For further information please contact Mr. Hosmer at Beta Consulting. |
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