Wednesday, April 8, 2009

Customer Service Champs or Chumps

by Tom Hinton

In the March 2, 2009 issue of Business Week, the magazine’s cover story was entitled Extreme Customer Service. Business Week touted a list of 25 companies they referred to as “Customer Service Champs.” I’m wondering if there was a typo. Perhaps, it should have read “chumps.”

Frankly, these types of annual customer satisfaction lists amount to little more than beauty contests. In this case it appears that Business Week wiggled and waggled the criteria in so many different ways, the Wicked Witch of the North might have come out a winner! Consider how Business Week arrived at its results. First, Business Week tinkered with the credible criteria of its sister-company, J.D Power & Associates. Next, Business Week padded the scoring with bonus points for industry leaders while punishing companies like Starbucks, which scored high among readers, but was penalized because none of its peers-competitors scored well (duh!). Finally, Business Week included the randomly subjective views of 1,000 of its own BusinessWeek Market Advisory Board. Seriously, folks, this is how Business Week gets us to their Top 25 Customer Service champs. Hmmm? It causes me to wonder if this exercise is about crowning customer service champs or selling more issues of their popular weekly magazine?

As I examine the rankings of the top 25 companies, I note that nearly half, 11 in all, of the 25 companies cited for customer service excellence received a grade of B+, B, or B- on one or both of the major criteria -- Quality of Staff and Efficiency of Service. This begs the question: How can a company that scores less than an “A” be crowned as a customer service champ?

Another consideration for the scoring was a company’s industry ranking. What does that have to do with customer service excellence? A company either gets it right with its customers -- like a Starbucks -- or it doesn’t. Incidentally, I only mention Starbucks because by Business Week’s own admission, Starbucks might have deserved to be on their top 25 list, but was not included because its industry peers scored poorly. So what? If that principle was followed across all industry sectors I seriously doubt a single automaker would be listed. But, somehow Business Week came up with four credible selections from the auto industry to grace their top 25 list of customer service champs. How interesting.

Another question I have regarding Business Week’s criteria is how does a customer judge the Quality of Staff? It’s superficial criteria because rarely do customers get close enough to an organization to competently judge its quality of staff. Just because Joe Hustler or Susie Saleswoman smiles and remembers my name does not mean they have superior product knowledge or customer service skills. Quality of Staff is tied to a company’s hiring and training process. It’s determined by a company’s culture and level of investment in people. Certainly, customer satisfaction is a byproduct of Quality of Staff, but to suggest a reader of Business Week would know the intricacies of how Amazon.com or Lexus develops its staff is nonsense.

And, what in the world does “Efficiency of Service” have to do with customer satisfaction? The answer is nothing. If Business Week had called it “Effectiveness of Service” I would be impressed. But “Efficiency of Service” is nonsense.

Let me offer an example that demonstrates the difference. This week I met a client for breakfast in a well-known chain restaurant. Miguel, the waiter, was friendly and efficient. When we asked for coffee or juice, he responded. When we requested a refill, he responded again. If I used Business Week’s criteria, the chain would score an A+ because Miguel was efficient. But, despite Miguel’s positive demeanor, the order was wrong. The bacon was not crispy and the scrambled eggs were dry. Yes, he served us quickly but that was not our criteria for customer satisfaction. We wanted him to get the order right! When a customer needs to flag down the wait staff to request more coffee or hot water that’s not deserving of an A or a B score. When the cashier failed to add the gratuity to our final check as requested causing us to wait until he could reprocess our credit card, that’s not deserving of an A or a B score. Efficient? Yes! Effective? No!

But, let’s set aside the flawed methodology of Business Week for a moment and examine their top 25 customer service champs. Maybe, by some stroke of luck, they got it right. Among the 12 companies that scored ratings of A+, A, or A- are: Amazon.com, USAA, Jaguar, Lexus, The Ritz-Carlton Hotels, Publix Super Markets, Zappos.com, Hewlett-Packard, Ace Hardware, Four Seasons Hotels & Resorts, Cadillac, BMW, and JW Marriott Hotels. At first glance this appears to be a solid list. But, what’s disturbing to me is that between #1 Amazon.com and #25 JW Marriott, there’s a spread of 170.14 points. What’s wrong with this picture?

The answer lies in the “B” squad results. You see, 11 companies -- T.Rowe Price, KeyBank, Nordstrom, Enterprise Rent-a-Car, American Express, Trader Joe’s, JetBlue Airways, Apple, Charles Schwab, True Value, and L.L. Bean -- all outranked JW Marriott (#25) despite the fact that their grades included a B+, B, or B-. Are you kidding me? So, you can see how a flawed criteria can skew the scoring results.

On that subject, I seriously wonder how three of these companies even made the list. Based on my personal experience and knowledge of their service performance I am amazed that Enterprise Rent-a-Car, American Express, and JetBlue Airways got past the first cut. For the past year, American Express has been canceling credit worthy card members to reduce its exposure in tough economic times. That’s understandable, but it's not good customer service. And, my experience with Enterprise Rent-a-Car has been disastrous. In three rentals, Enterprise never got it right. Of course, their rental car competition leaves much to be desired as well. And, fair or unfair, JetBlue Airways cannot possibly be considered a serious contender for customer service champ as long as the image of passengers left stranded on JetBlue airplanes for up to 11 hours during an ice storm at JFK on Valentine’s Day 2007 remains fresh in our minds. Sorry JetBlue, but that’s a deal-breaker in my book. For what it’s worth, Business Week scored JetBlue Airways above Apple, Charles Schwab, and BWM among others. Go figure?

Of the remaining 8 companies on the “B” Squad, I seriously question how top performers such as Charles Schwab, which rates a perfect score based on my personal experience, and Apple, which continues to run circles around its competitors as the leader in consumer electronics innovation, rank below the pathetic “Double B” score of Enterprise Rent-A-Car? Business Week can’t be serious!

Perhaps it can be argued using valid data that companies like Nordstrom, the once-legendary customer service role model, and True Value, the hardware store that only scored a pair of B+s, should have scored higher in the Business Week customer service poll. But, these are tough times and some companies have cut staff and training to save money. If that’s the case, they don’t belong on the top 25 list.

KeyBank of Cleveland and T. Rowe Price, the brokerage firm, get a pass. I cannot dispute their service performance since I have no personal experience with either company, nor have I studied their customer service ratings.

I do find it interesting that four automakers -- namely, Jaguar (#3), Lexus (#4), Cadillac (#14), and BMW (#22) -- all scored A+ ratings with Business Week despite the fact that most consumers rank the auto-buying experience just below a visit to the dentist. Perhaps, Jaguar has done some remarkable things in the past 12 months to earn its position as the customer service champ of automakers. But I doubt it. Jaguar would have to be wizards to push ahead of Lexus and BMW on their customer service scores.

So, there you have it, folks. The top 25 customer service champs. With all due respect to Business Week, the numbers just don’t add up. Having said that, I do consider Business Week to be among the top 25 business publications in America!

About the Author. Thomas Hinton is president & CEO of the American Consumer Council, a non-profit consumer education organization which administers the Green C Certification program for companies and organizations. For more information, visit: www.americanconsumercouncil.org

3 comments:

Anonymous said...

good one... thanks for sharing....


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Mark Jacobs Media said...

Very good rebuttal of the Business Week article. I would stick with Consumer Reports if I was seriously looking for unbiased rankings of customer service. Who really knows how or why Business Week came up with their rankings. I'm suspicious of J.D. Power and Associates as well.

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