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How to Increase the Value of Your Company by 25%

If you focus on your competition, you will constantly be playing catch-up.    While you and your competitors are busy fighting over fractions of a market-share point, someone else will come in and completely change the game.

In May of 2003, I experimented with 9 service leaders. I invested $1,000 in each of the below service leaders.  I wanted to prove that service leaders continue to grow because they focus on the service strategy.  Following is proof that a service culture will increase the value of a firm by way over 25% and much more if you concentrate on service. This shows the increases/decreases over a 13 year period. It’s a game changer!

Amazon is now worth over $21,000 (increase by 2,000%) ~Amazon has a set of practices that helps them manage customer experiences in a proactive and disciplined way.  They allow their employees to assist in creating new and innovative approaches that have a profound impact on the customer experience.

Home Depot is now worth $6,030  (increase by 503%)~ The Home Depot is passionate about the Customer experience.  They are the world’s largest home improvement retailer.  They feel their single greatest asset is their more than 385,000 associates.  They remain committed to helping customers by providing an excellent customer experience.

Costco is now worth $5,400 (increase by 440%)  ~ Costco explicitly targets customers with more money and with locations in more upscale shopping areas.  Costco is committed to low costs and high wages.

TD Bank is now worth $3,218 (increase by 221.8%)  ~ Formerly Commerce Bank.  They were the leader in increasing the value of their company when Vernon Hill was CEO before selling. There focus is no longer solely on the customer as much as it is on processes and procedures. 

Southwest Airlines is now worth $2,883 (increase by 188.3%) ~ Under Herb Kelleher, the company’s co-founder, had a relentless emphasis on internal customer service that showed in their interaction with their customers.  They have taken all the “fun” out of Herb’s original intent and it shows in their financials

NOTE: Focusing on a service strategy for the past 13 years has proven difficult for the following firms.  They redirected their focus to the bottom line instead of fanatically improving and focusing on the customer experience.

General Electric is now worth $1,665 (increase by 66.5%) ~ Jeff Immlet is no Jack Welch.  His focus is on his personal compensation.  The more he gets paid the worse they do. This proves that losing your focus on customer service is devastating to your bottom line.

Walmart is now worth $1,552  (increase by 55.2%) ~Sam Walton built Walmart on Customer service and price.  They are now known for price only.  While revenue has increased over 400% the value of their company as a service leader has dropped dramatically. When Lee Scott took over in 2000 as CEO they lost their focus on customer service. Proving the fact that sometimes bigger is not always better!

JetBlu is now worth $1,425 (increase by 42.5%) ~ When they had passengers stuck on a plane for 13 hours they lost their value and brand.  They did not have empowered employees that could make a decision to service customers and ended up with less than stellar improvement.

Dell is now worth $465 (decrease by 53.5%) ~Dell lost their brand when Kevin Rollins took over as CEO and eliminated the customer experience. Sad story to impart.  Dell at one time was such a leader and moving in an upward direction.  They lost their focus on customer experience and service.

The new battleground is all about experiences.  Some companies do customer experiences better than the majority.  I believe most executives do not understand the service strategy. They do not realize how money falls from the sky. It takes a lot of effort. It takes a relentless commitment from top management. It means you’re creating a service culture. The results are… huge increases in revenue!

 In today’s fiercely competitive world companies spend millions on the land, building the store, and stocking it full of product, all for one thing—the customer.  But, when the customer actually appears, they fall down on the job.  All that time, thought, and money wasted if the customer walks out, never to return.

There is a direct connection between customer service, or lack thereof, and money made and lost. Do not lose money because you did not invest in developing superior customer service skills for your entire workforce and building a customer-driven organization. You cannot just sit around and hope the next big thing will work magic. Not today, and especially if you have not been building a culture of customer service.

NOTE: Jeff Bezos at Amazon is now the 4th richest person in the world with a net worth of $59.2 billion. (Most CEO’s just don’t understand the power of delivering great service. Or maybe it’s too much work). Sales last year at Amazon increased over 20% to $107 billion. They are rated number one in the world for customer service.

“Customer service is the only strategy you can implement anywhere in the world and your competition will not copy you.  I’m not sure why CEOs don’t follow some of the top companies in the world.  Maybe it’s just too much work or the strategies are a bit too soft for them to deal with”.  –John Tschohl


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