As a consumer, one of my biggest turnoffs to a brand or product is poor customer service. Everyone dreads facing strict return policies, or holding for the "next available representative" for hours on end. In our increasingly competitive marketplace, it's more important than ever for businesses to remember that the customer is king. One bad experience could drive customers toward a competitor instead.
Despite the importance customers place on their experiences with a company, U.S. companies lose half of their customers every five years, with two-thirds of them claiming that customer care was their reason for leaving, according to a recent Harvard Business Review study.
As investors, customer loyalty of a company is an important component to analyze. Not only does great customer service attract new customers, but it also keeps those customers coming back. Retaining customers is vital for companies to improve profitability; the study showed that it costs six to seven times more to gain a new customer than to keep an existing one. Additionally, it stated that improving customer loyalty by 5% can increase profits 25%.
Here are nominees we believe offer the most pleasant customer service experience. Remember to vote for your favorite here.
Blue Nile (Nasdaq: NILE )
Online diamond and jewelry retailer Blue Nile may offer its products at some of the lowest prices among competitors, but there's nothing cheap about the way it treats its customers. Buying high-end jewelry may be intimidating to some, but every purchase is returnable within 30 days, to ensure that each customer is satisfied. The website has an entire section where shoppers can educate themselves extensively on diamonds and precious metals. And for customers who need additional help finding the perfect piece of jewelry, there's no need to fear picking up the phone to call the customer service team; each call is answered by a human within seconds.
Netflix (Nasdaq: NFLX )
In the heated battle between Netflix and Blockbuster, Netflix launched a new customer service team earlier this fall. The upgraded customer experience gives the company an edge over its major rival as it tries to get closer to its customer. Netflix discontinued its email-based customer service and set up a live call center in Hillsboro, Oregon, a location where service workers are known to be more polite. Further, the company gives service representatives the freedom to be generous when dealing with discontent customers, such as crediting accounts or offering free gifts. Beyond the experience with a service representative, the company has been improving its site to make searching for movies easier.
Amazon.com (Nasdaq: AMZN )
Along with Amazon's 30-day refund policy, the company will happily reimburse you for an item that decreases in price within 30 days of your purchase. The company has created an online shopping community that provides helpful comments from fellow Amazon shoppers and gives detailed descriptions of every item. The site also supplies recommendations for other products the shopper may like, based on previous purchases and provides easy access to track recent orders. Additionally, a $79 annual Prime membership grants customers free two-day shipping for an entire year and discounted overnight shipping.
Nordstrom (NYSE: JWN )
Upscale retailer Nordstrom is legendary for its superior customer service. In fact, there's even a book written about it. Their personal shopper service, Personal Touch, requires no minimum purchase and hires sales personnel trained to know everything there is to know about the products they're selling. Those employees are also taught to do whatever it takes to please the customer. Shoppers with too many shopping bags have the option of a concierge service to hold them, and stores hold customer appreciation events with food and drinks. Nordstrom is so well-known for the experience it provides its customers, there are rumors that an employee once allowed a customer to return a set of car tires, even though the company has never sold such a product.
CarMax (NYSE: KMX )
Keeping employees happy is a key element to providing quality customer service. Since CarMax has been listed as a "Fortune 100 Best Company to Work For" three years in a row, it should come as no surprise the company is able to provide an outstanding customer service experience. For example, last year an employee drove 12 hours to retrieve a signature from a co-signer for a customer in need of financing. The company boasts a five-day money-back guarantee and claims that 93% of its customers would refer the company to a friend. And unlike most car dealerships, the prices are clearly marked, making your purchase haggle-free.