RSR Research: The ‘Kings of Customer Service’ – Not Who You’d Think

Discussion
Apr 19, 2011
Paula Rosenblum

Through a special arrangement,
presented here for discussion is a summary of an article from Retail Paradox,
Retail Systems Research’s weekly analysis on emerging issues facing retailers.

"Service" generally implies personal attention. Yet the number one
company on Temkin Group’s Kings of Customer Service list was Amazon.com,
a retailer one almost never has any kind of human interaction with. Another
three of the top ten were warehouse clubs. If you asked the founders
of these three clubs if their core competency was customer service, I’m
fairly certain they’d say no — their value proposition is about
tonnage products at great prices. I shop at Costco and I shop at Amazon. I
would call Costco "kind
of fun" and Amazon "easy," but I would never describe them
as great customer service experiences.

The findings, based on a survey of
6,000 U.S. consumers, had three criteria for ranking: functional, accessible
and emotional. Okay, I agree that Amazon is very functional and accessible.
But emotional? And the warehouse clubs are very functional. But accessible?
Emotional? Not so much.

Then there’s Apple, which only made #79 on the
list. On this score, I became (and remain) confused. Perhaps the customers
were talking about support for their iPhones or iPods, and this is where my
own anecdotal experience gets in the way. But for my money, Apple is knocking
the ball out of the park.

The 2011 Temkin Experience Ratings:



1. Amazon.com

2. Kohl’s

3. Costco

4. Lowe’s

4. Sam’s Club

6. BJ’s Wholesale Club

7. Walgreens

8. Old Navy

9. Target

10. Rite Aid

Source: Temkin Group

I bought my first Mac ever in December — a Macbook
Air. This is one beautiful looking machine, so I was really dismayed when I
clumsily dropped it on the floor and crushed the corner of the case. Still
functional; no longer beautiful. I had bought the extended protection program
so I made an appointment at the Genius Bar at my nearby Apple store.

Before
I go further, I must say that in general the state of customer service in Miami
is pretty abysmal: rude, pushy and rarely helpful. The Apple Store made a lie
of that. I was treated like a queen. My helper, Martin, looked through my file,
looked at the Mac and said, "We really don’t cover this
type of damage." I wasn’t so surprised. He told me the cost to
repair would be $825. That wasn’t going to happen. I just sat there and
he kept typing. Then he said, "Paula, since this is your first Mac, and
you just got it a couple of months ago, I’m going to go ahead and get
this fixed for you under warranty, just this once. Let me confirm that with
my supervisor and I’ll be right back." Sure enough, he came back
in under two minutes confirming they would repair the computer, and printing
a receipt for me to take with me.

Accessible? Check. Functional? Beyond functional.
Emotional? I think Martin gave me my happiest experience in an otherwise crummy
week.

So where does all this net out? No customer service is better than poor
customer service, but those of us lucky enough to experience real customer
service become dedicated for life. And just as I will likely never buy another
of a certain brand of PC, it would be very easy for me to buy most anything
at an Apple store.  The Kings of Customer Service are those who (to
re-use Jack Mitchell’s
phrase) "hug their customers." I feel hugged.

Discussion Questions: Is the criteria consumers use to judge customer service changing?  How can more retailers turn customer interaction from a liability into a plus?

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30 Comments on "RSR Research: The ‘Kings of Customer Service’ – Not Who You’d Think"


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Doug Stephens
Guest
Doug Stephens
10 years 19 days ago

Criteria and expectations are absolutely changing. Customers increasingly expect either a super-efficient, convenient experience on the one hand or a super-high-fidelity experience with high-touch service on the other. There’s no middle ground. Great experiences are happening in small stores, box chains and digitally–there’s no one formula.

This why I find it so curious that some analysts rail against companies like Amazon, Zappos and others for what they view as a lack of personal “human” customer service. Meanwhile these companies continue to delight their customers.

Bob Phibbs
Guest
10 years 19 days ago

Thank you for calling out the disconnect in such surveys, Paula! A real retailer has many moving parts to coordinate and deliver true customer service. Customer Service with Amazon is easy to deliver. Same with Zappos.

Gene Hoffman
Guest
Gene Hoffman
10 years 19 days ago

Every time I get exactly what I’m looking for, immediately when I want it, in an orderly environment, at a fair price and without any hassle, I look upon that provider as offering good customer service. Unless I am atypical, these values supersede price, location and discounted promotions.

Max Goldberg
Guest
10 years 19 days ago

I don’t know if the criteria are changing, but consumers know good customer service when they get it. Consumers want retailers to take ownership of their retail problems and provide solutions rather than excuses. That has not changed over time. It does not surprise me that Amazon and Costco are on the list of the best retailers. I have never had a bad experience with Amazon, and Costco’s helpful staff and return policy would also put them near the top of my list. I am curious about the relatively low ranking of the Apple stores. From personal experience, their customer service has always been superb.

Ralph Jacobson
Guest
10 years 19 days ago

The criteria for a good shopping experience isn’t changing all that much. Giving customers what they desire has always been the goal. The situation is, now that competition has heated up more than ever, and differentiation has become the driver, employees are the chief means of differentiation. Offering an unexpected level of service that bends the rules a bit is a sure way to keep the customer the retailer worked so hard to get.

Richard J. George, Ph.D.
Guest
10 years 19 days ago

Customer service has never been simply about “smiles” and “thank you.” To delight the customer you need to exceed expectations by delivering a little bit more than you promise. While customer service appears to turn on human interaction, the best customer service companies have systems in place to ensure that the transaction is hassle free. One of the best examples of a system that works sans “face-to-face” interaction is USAA. Internet interaction is outstanding and when you call the organization the customer service reps have systems in place that address your needs both efficiently and effectively. It is the system that drives the customer service interaction. Focus on the system and develop the people to work within the system.

Bill Emerson
Guest
Bill Emerson
10 years 19 days ago
There are a lot of conclusions to be reached from this survey. The first is that, almost without exception, the leaders on the list all compete on value pricing. To me, this speaks to who was polled and/or who chose to respond to the poll. Perhaps the survey should have been titled, “Best Service in the value channel.” In fairness, the value customer (certainly these days) is the largest segment of the population. The second conclusion would appear to be that the definition of service, regardless how the question is asked, has become “who best fulfills their brand promise?” Each of the leaders on the list do a terrific job of meeting or exceeding the customer’s expectations. Which leads to the third conclusion. Exceeding brand expectations works well in all channels. Like Paula, I recently became an Apple convert and have had the same experience in their stores. While they may not be on the survey, their stores produce over $2,000/foot in revenue and they have the second highest market capitalization in the world, even… Read more »
Gene Detroyer
Guest
10 years 19 days ago
It was exactly who I thought. I got no further than the headline of today’s discussion and said to myself Amazon is #1. Clearly confirmed by the list. Once upon a time people said, “Let’s go shopping.” It was a leisure activity. It was an event. It didn’t necessarily have a purpose of buying something specific or needed. That is a phenomenon that started in the ’60s and has now past. Consider the list. Perhaps with the exception of Kohl’s and Target (and I emphasize “perhaps”) a trip to any of the other retailers has a purpose. And what makes the retailer successful on this list is that it meets those shoppers’ purpose. These retailers are objective oriented for the shopper. I wrote several times about my Christmas shopping experience with Amazon. But last month, I had another great experience with Amazon. I was in France for my French grandson’s birthday. He got a great present that I knew my oldest grandson in the U.S. would love. So I went online to look for it… Read more »
Ryan Mathews
Guest
10 years 19 days ago

We’re dealing with mixed metaphors here.

There is a difference between “service” and “service recovery.”

Amazon, for example provides service–the efficient sourcing, shipping of books et. al. Paula’s example at Apple falls more in line with my idea of the evolving nature of service recovery–what do I as a retailer do when my associates and/or customers start coloring outside the lines.

Are definitions changing? Absolutely. Just watch the insurance company ads on television which promise buyers they can deal with a person when they want to or a machine when they want to. Odd promise? Well, how many of us prefer “service” from an ATM or online banker to having that warm and fuzzy direct teller experience?

Service is judged in respect to how consumers live their lives and lifestyles are changing. It’s a moving target but one thing is for sure–old definitions increasingly fail.

Dan Frechtling
Guest
10 years 19 days ago

Given the criteria used, it’s not surprising that the low-cost positioning, rather than high service, carried the day. Functional and accessible are basic criteria. Even emotional, asking how respondents “feel” rather than delving into deep connections.

Not only did low cost win in retail (Amazon, Costco, Sam’s), it also won in airlines (Southwest) and wireless (Tracfone).

In addition, industries that earn low marks for cost sunk to the bottom of the ratings. TV service providers were the worst performers, followed by health care plans and ISPs. The driver of the poor scores was the emotional criterion.

Amazon is on somewhat of a roll with customer perception surveys in this forum. It also won first place on Millward Brown’s value scale last month, which also used price as a key evaluation component.

Steve Montgomery
Guest
10 years 19 days ago

As noted by many of the comments, the elements of what goes into customer service is changing. I admit I am very happy to use a self serve register and have no interaction with someone at many locations. I regard that a good customer service–I got in, got what, I wanted, and got out quickly.

The same is true online–it was easy to locate what I wanted, the check out process was easy to use, and the product ordered was delivered when I wanted. Bottom line in both type of shopping my expectations were met.

The same is true for going to a Nordstrom. I have a set of expectations far different than what I would have at a Target. As long as my expectations are met, I regard that as good customer service.

Paula Rosenblum
Guest
10 years 19 days ago
I’ve been giving a lot of thought to Apple’s low rankings and I think I have an answer. I believe it has to do with AT&T’s lack of support for the iPhone, and pushing it off onto Apple. AT&T takes very little responsibility for the devices it sells. When I need a software update to my cell modem (the only AT&T product I have) I have to go to the manufacturer’s web site. When my friends have problems with their iPhones they have to call Apple. I was told yesterday that you can’t even get insurance on the iPhone from AT&T. I bought a Verizon iPhone. When I call for tech support I get a Verizon CSR. I DO have insurance on the phone. Verizon has always taken responsibility for its products. So…I’m thinking that is the source of customer frustration–the iPhone support, antenna farkle and overall lack of help from the putative provider, AT&T. Otherwise, it makes no sense at all. I’ve become a convert because Apple’s service is so astounding (because as a… Read more »
Dick Seesel
Guest
10 years 19 days ago

As many panelists have pointed out (today and on other discussions), “service” is really being redefined as “good execution.” In the case of most of the retailers on the Top 10 list, the issue isn’t whether they offer “high-touch” contact by a sales associate (like a traditional department store) but whether they execute their mission well. Does the store do a good job staying in stock? Does it operate the “front of the store” effectively? (In the case of Amazon…a virtual storefront.) Does it make the return process relatively hassle-free? Most of the stores on the list meet these expectations–and offer value. I’d question Walgreens from my own experience but in their case the convenience factor is a key element of the customer experience.

Ed Rosenbaum
Guest
10 years 19 days ago

Paula, I thoroughly enjoyed reading your article. It brought out many points the survey might have missed. In my opinion there is nothing worse than poor customer service in the shopping experience whether on line or in the store. I have to admit my amazon.com and Zappos experiences have been superb. Well above whatever the norm is supposed to be. Amazon.com was good. Then they bought Zappos. That made the experience even better than before. Zappos can teach the world what customer service is. I can’t speak to the warehouse store experience. That is my wife’s department. I will say she comes back from Costco having enjoyed shopping there.

I am in need of a new laptop. Paula, you have sent me in a new direction, if at least to look and compare.

Ben Ball
Guest
10 years 19 days ago

The definition of customer service has most definitely shifted in favor of functionality. This is for one very simple reason–the preponderance of human interaction in the retail environment is dysfunctional.

Warren Thayer
Guest
10 years 19 days ago

I agree with the basic thread here. But I’d be confused by the survey itself. If service is not accessible, it doesn’t matter if it is functional or not. If it is accessible, but not functional, it’s also useless. Faced with either situation, a shopper is likely to become “emotional” and very unhappy.

Cathy Hotka
Guest
10 years 19 days ago

Remember when retailers used to talk about keeping customers in the store as long as possible? They’re going to need to snap themselves out of that mindset when they have viable competition that not only doesn’t have stores, but prides itself on completing each transaction very quickly. If customers want to find and purchase items efficiently and conveniently, that changes everything. Will your company be Amazoned?

Bryan Amaral
Guest
Bryan Amaral
10 years 19 days ago

Admittedly, I have not gone through the underlying data, but I agree with your assessment that the results are counter-intuitive. How large and what was the demographic background of the sample? Respondents are most likely to score those retailers and brands that they are most familiar with. Not everyone can afford premium priced computers or mid-to-upper market products. The further up the “luxury” ladder one goes, the more likely the focus on differentiating with extraordinary service. I just wonder if the sample may have skewed the results somewhat.

Camille P. Schuster, PhD.
Guest
10 years 19 days ago

Service means different things to different consumers AND researchers. The Temkin report assesses consumers’ responses to the functional, accessible, and emotional components of experience with the retailer. None of these criteria have to be face-to-face and nothing asks specifically about smiles. I agree that face-to-face interaction or smiles are not necessarily criteria consumers use to evaluate satisfaction with consumer service. Depending upon the criteria used to determine customer satisfaction with service the results will differ because there is not one commonly agreed upon definition for consumers or researchers.

Bill Robinson
Guest
Bill Robinson
10 years 19 days ago

The list is just amazing. How could it be that it just includes one department store–Kohl’s? Where are Nordstrom, Nieman Marcus, Saks, Dillards? All of these chains have extraordinary service, have invested in the service infrastructure. How about JC Penney, even Macy’s?

What about the specialty stores that do such a great job with service? Container Store, J.Crew, Jos A Banks, Men’s Wearhouse and many others?

What I see on the list includes self service chains such as wholesale clubs and drug chains. These chains provide a functional experience, long lines at the check out, and impossible to reach store employees. Something is wrong with the survey.

Tim Henderson
Guest
Tim Henderson
10 years 19 days ago
Given how consumer lifestyles change, as well as retailing, what defines good service must also change. But only the consumer can actually define what constitutes great customer service, because what one considers great service will certainly differ from one customer to another and from one shopping experience to another. Retailers can help ensure every shopper enjoys a good experience by first setting customer service expectations–i.e., clearly indicating what they will do (and thus, will not do)–and then adhering to those principles. Amorphous statements like “the customer’s needs always come first” mean little. But something like “if you require assistance getting packages to your car, simply ask the cashier and we will provide a staff member to help you” is much clearer and sets a standard. Merchants can also help themselves by ensuring their customer service standards are repeatable. Paula’s experience at the Apple Store, while nice, is probably not repeatable across every consumer or across every retailer. For Apple, it almost sets the expectation among other brand customers that they should also receive the same… Read more »
James Tenser
Guest
10 years 19 days ago

I remain amazed that many customer service “experts” are hung up on communications training and rote good manners. Phooey. Make your shoppers successful and your customer-facing people successful and great experiences will surely follow, I say.

Which is why Dr. George is sooooo right about the “system” being key to service. If the system doesn’t work reliably for the shopper then no amount of training or attitude adjustment can make for a good service experience. As an example, being in-stock on a desired sale item now is infinitely better than a prompt, sincere apology and a rain check.

So no wonder that Amazon rises to the top of the list in this survey. Its system works with incredible reliability. Shoppers succeed almost every time and human intervention is almost never needed.

In the end, well-designed, well-implemented service practices rule.

John Karolefski
Guest
10 years 19 days ago

I’m surprised that Publix Super Markets is not in the top ten. Let the record show that this chain has delivered outstanding customer service over the years. Most recently, it was ranked as one of BusinessWeek magazine’s top 25 Customer Service Champs (2007-2010). Publix received the “Customers’ Choice Award” from the National Retail Federation Foundation in 2010, and the same year was one of the top “10 Companies That Treat You Right” in a poll conducted by MSN Money-Zogby.

So, let’s see: BusinessWeek, NRF, MSN Money, Zogby, and Temkin Group. Which one does not belong?

As one poster noted: There’s something wrong with this survey.

Rama Ganesan
Guest
Rama Ganesan
10 years 19 days ago

This survey is about Customer Experience. The items are as follows:

Thinking of your most recent interactions with each of these companies, to what degree were you able to accomplish what you wanted do? (completely failed – completely succeeded)
Thinking of your most recent interactions with each of these companies, how easy was it to interact with the company? (very difficult – very easy)
Thinking of your most recent interactions with each of these companies, how did you feel about these interactions? (upset – delighted)

None of these items deal with customer service as we might normally think of the term, interaction with front line employees and so on. Looking at the Tempkin website, I see that the Customer Service Ratings are “Coming Soon.” Depending on its items, that survey could tell us something very different from this one.

Herb Sorensen
Guest
10 years 19 days ago

Better get used to companies like Amazon being high the list for customer service. We’ve discussed the ongoing Convergence of Online, Mobile and Bricks-and-mortar (COMB) retailing repeatedly. Doesn’t anyone believe that this is a reality happening right now? Do we think the Amazon/Walmart confrontation is some schoolyard game? The only thing that surprises me about this discussion is not that Amazon was #1, but that apparently this is surprising.

The world has changed, and it is NEVER going back to where it was.

Steven Baum
Guest
Steven Baum
10 years 15 days ago

This survey is a joke. Amazon is all phone/internet…Kohl’s has no customer service, just check out capability; no help on the floor. However, kiosks are great and returns are easy. Nordstrom is the tops in customer service by far. Criteria needs work.