​Jeff Kagan: Why Only Some Companies Grow

Jeff Kagan  |

Like you, I do business with quite a few different companies. Over time I have learned that all companies are not created equal. Why is i t that customers love some companies, hate others, and couldn't care less about the rest? There is a real reason, and whether you are an executive, worker, investor or customer, this secret is important to know.

Think about it: Why do customers love the iPhone and iPad? The simple reason they love it is Apple (AAPL). Apple is a huge company, and it would be so easy for them to not care and leave the customer to fight for themselves. However, Apple shows they care. You can go online for help, call their toll free number or visit them in an Apple Store and get your problems solved. That’s one of several reasons customers really love the company. Apple is not perfect, but customers tend to overlook the bad parts because they feel the company cares.

Showing the customer that you care about their happiness and satisfaction goes quite a long way toward building success. If so, why then doesn’t every company focus on this? The reason typically is the company simply doesn’t care. Most companies make a mistake. They focus on the investor. Others who focus on the customer and the worker typically are much better at making customers happy and growing long term.

Most companies are in the vast middle ground. No problems, but no real emotional connection with the customer either. So when a competitor jumps in with something better, customers flee. This is what happened to Blackberry (BBRY) and Nokia (NOK) when Apple iPhone and Google (GOOG) Android entered the smartphone marketplace. They got clobbered.

Here are a few examples I have discovered over time of companies that know how to treat a customer right...and some who don't. Compare them to your own:

  • Sonesta Resort Hilton Head
    Sonesta Resort on Hilton Head Island is a winner. Sonesta is a resort that does a great job of offering top quality, but customer satisfaction also depends on how the customer “feels” about the way they are treated. We have been customers for decades. We started when it was the Marriott (MAR) then Crown Plaza and now Sonesta. What keeps us happy is the people who run the place. The staff makes sure we are treated like gold and feel good. That’s why we have been such a long time customer. And I have heard this from countless other vacationers over time as well.
  • LA Fitness
    LA Fitness is a fitness center that I liked, until they broke my trust. I was a member and also signed up my son. Never paid attention to it for the next several years. Then I realized my son had cancelled the membership years earlier. I contacted LA Fitness. They offered no help even though they could see he had not used his membership in years. When I asked for a refund, they said no. They shouted loud and clear about how they felt about the customer. Customer care? I don’t think so.
  • L.L. Bean
    LL Bean is another winner. We have been shopping this store online and in person for more decades than I can remember. We started when we were teenagers. Their clothing is always top quality, dependable, long lasting and any problems are quickly handled by their customer care people, who really do seem to care. This makes all the difference in the world.
  • Land’s End
    Land’s End used to be one of my favorite places to shop as well. However, the quality of some of their clothing has really dropped in my opinion. One example is a casual belt, which I bought year after year in a variety of colors. It used to be thick and really work well. Now it’s too thin, stretches too much, doesn’t hold its shape and worse yet, doesn’t hold your pants up. They still take good care of the customer, but if the quality of the product is gone, so is the customer.
  • Lexus and Toyota
    Lexus and Toyota are two great car companies owned by the same corporate parent. I have purchased cars for decades and have complained for decades. However, when I found Lexus and Toyota (TM) the complaints stopped. Even among these two great brands, there are still stellar dealerships. One of them is Cobb County Toyota in the northwest Atlanta suburbs. Rob Smith and his whole team have always been honest, always offered great service at low prices and have done so for more cars than I can remember. That’s one reason I keep coming back.
  • Grundig Shortwave Radio
    When I was a youngster, my Uncle Arthur turned me on to shortwave radio. You could listen to radio stations broadcasting the news from other countries around the world. Grundig is a leader and over the years I have owned many of their radios. However, during the last few years they have disappointed me. I have several Grundig radios, whose outer case is becoming sticky and deteriorating so I can no longer use them. The quality of their devices are now overshadowed by this sticky mess with no solution when I called.
    These are just a few of my own personal experiences. I am sure you have your own and I’ll bet they are very similar, right? Some companies have a great product and great customer care. These are the winners we will do business with forever. Some companies have a great product with lousy customer care. Other companies have a poor product with poor customer care.
    Company growth depends on a variety of things like product quality, strong brand name and top notch customer care. Without all of these, customer satisfaction is simply not there. And customer satisfaction is key. Deciding to be a leader in your sector when it comes to customer care is one of the strongest building materials you can use to grow your company.
    And not just from the corporate level, but from the squishy middle as well. Make sure the staff that deals with the customer understands the importance of treating customers like gold. This should start at the top level and work its way down. Of course in some companies it starts with an individual location and spreads out from there.

Advice from Dad: Customer Satisfaction is Key

The lesson I learned from my father in his store when I was young is to always treat the customer with respect. Never argue. You can’t win an argument with a customer. Even if you are right, if you win and the customer loses, you lose the customer. Period. End of story. If you do that, you will keep that customer forever. And isn’t that the secret sauce? The problem is, only a few successful companies know enough to use it...and they continue to prosper.


(Photo by Daniel Iversen)

Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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