"...keeping you great" Ten Minutes with the Growth Guy
HEADLINES:
The top customer satisfaction companies beat the Dow Jones by 93%, S&P 500 by 201%, and NASDAQ by 335% (more on this below) -- Customer service is back as a hot topic. And THE thought leader on the subject is John Dijulius, author of Secret Service: Hidden Systems that Deliver Unforgettable Customer Service and the soon to be released (Spring 2008, Wiley) What’s the Secret? To Being a World-Class Customer Service Organization. What I like about John’s work is that it’s highly practical, specific, and implementable -- not a bunch of feel-good platitudes -- check out his video, Tom Peters endorsement, client list (Starbucks, GE, etc).
December 13, DC, Dijulius half-day workshop -- John Dijulius is going to produce an interactive DVD and you can be one of the audience participants -- an opportunity for you and your team to learn from Dijulius -- $99 vs. the normal $595 fee -- limited to 40 participants given the size of the studio (same place as the Medvec taping) -- first come, first serve. Go to this link to sign-up. Outline of workshop under DETAILS below.
Back to the study -- to give me a break the week of Thanksgiving (U.S.) I asked John Dijulius if I could share one of his latest weekly insights where he highlights Claes Fornell’s article entitled "Customer Satisfaction and Stock Prices: High Returns, Low Risk." Here’s his insight -- worth the three minutes to scan.
Is an investment in customer service really worth it?
In an article titled "Customer Satisfaction and Stock Prices: High Returns, Low Risk," author Claes Fornell uses the result of extensive research and studies to prove that an increase or decrease in customer satisfaction not only greatly impacts each individual organization, but also has a significant impact on the future health of the economy. Fornell is the director of the American Customer Satisfaction Index, a leading indicator of consumer behavior measuring the satisfaction of consumers across the U.S. Economy.
His findings are consistent with previous studies indicating firms that have higher customer satisfaction are more likely to enjoy both a higher volume and more stable net cash flow. Their study proved investing in the leading ACSI companies consistently outperformed the market by considerable margins.
THE SMOKING GUN
Several studies were used comparing the top ACSI companies against the market with regard to stock performance over a six-year period (1997 to 2003) where the stock market had both ups and downs. The results were astonishing. You may have known the importance and benefits of providing consistent superior customer service, but I doubt you realized how significant it really is!
The top customer satisfaction companies beat the Dow Jones by 93%, S&P 500 by 201%, and NASDAQ by 335%.
The results conclusively show that customer satisfaction pays off in up-markets and down-markets. When the stock market dropped in value, the stock prices of firms with highly satisfied customers seemed to have benefited from some degree of insulation.
No one can argue that these results are extraordinary. There are very few actions or strategies a business can take, if any at all, that can produce these kinds of financial results. This is proof that there is a significant return on investment in improving an organization's level of customer service. In the accounting world, the economic value of satisfied customers seems to be systematically undervalued even though these customers generate substantial net cash flow with low risk. Firms that do better than their competition in terms of satisfying customers (as measured by ACSI) generate superior returns at lower systematic risk.
It is conclusive that organizations that consistently deliver superior customer service generally enjoy repeat business, lower price elasticity, higher prices, more cross-selling opportunities, greater marketing efficiency, and a host of other things that usually lead to earnings growth. In addition, several research studies find that higher customer satisfaction has a positive impact on employee loyalty, cost competitiveness, profitable performance, and long-term growth.