Which Brands Are Best In Customer Service?

posted by HL - 

Smiling call center employees sitting in line, good customer service
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Every company in the United States likes to promise an exceptional customer experience. Polls show that at least some corporations do an excellent job keeping their promise — these companies provide great customer service.

In order to find those companies that truly stand out by creating positive customer experiences, 24/7 Wall St. collaborated with research survey group Zogby Analytics, which polled more than 1,500 adults about the quality of customer service at 151 of America’s best-known companies in 17 industries, asking if the service is excellent, good, fair, or poor.

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The companies with the highest share of poor ratings make up the Customer Service Hall of Shame, while those with the highest share of excellent ratings make up the Customer Service Hall of Fame. E-commerce company Amazon tops the list yet again — for the seventh year in a row. Phone and electronic device manufacturers Apple, Samsung, and Sony; restaurants Chick-fil-A and Starbucks; and mail carriers FedEx and UPS also made the Hall of Fame this year. Hospitality companies Hilton and Marriott as well as Internet companies Youtube, Netflix, and Google also made the list.

Click here to see the Customer Service Hall of Fame.

Click here to see the Customer Service Hall of Shame.

Click here to see our full methodology. 

Most of these companies serve thousands of people every day, and bad customer service experiences invariably occur. It is for this reason that branding and customer service go hand in hand, according to Tim Calkins, clinical professor of marketing at Northwestern University’s Kellogg School of Management.

In an interview with 24/7 Wall St., Calkins explained, “With positive feeling for a brand, [customers] are inclined to both appreciate positive experiences and be forgiving of negative experiences.”

In other words, if consumers like the product, and the overall experience with the brand is positive, they are more likely to rate customer service well — even if there are occasionally bad experiences. When asked to rate the overall experience with a company as positive or negative, 75% or more people gave a positive rating to 14 of the 15 companies in the Hall of Fame.

Healthy competition within an industry also tends to improve the quality of customer service. “When customers have choice then there is more pressure to deliver a great experience,” Calkins said. While this is specifically not the case for the cable and Internet service provider industry, which is represented by multiple companies on this year’s Hall of Shame, competition largely explains the high customer service ratings at companies such as Hilton and Marriott. Calkins added that UPS competes with FedEx, Samsung competes with Apple, and for each of these companies, “there is competitive pressure to keep up.”

In addition to competition, some of these companies succeed at providing stellar customer service by focusing intensely on this aspect of their business. Customer service expert and consultant Shep Hyken described Hilton, Marriott, and other members of the hospitality sector as having “a culture of service.” Similarly, Amazon’s nation-leading customer service rating is likely due largely to its focus on the customer. The company’s first of four guiding core principles is “customer obsession rather than competitor focus.”

Technology companies like Amazon, and hospitality companies like Hilton share this customer focus. In an email exchange with 24/7 Wall St., Praveen Kopalle, professor of management at the Tuck School of Business at Dartmouth College, highlighted the importance of creating not just a good customer experience, but a unique one. These companies, he wrote, “strive to create a personalized environment for their customers—be it Apple or Victoria’s secret. For personalization to work smoothly, customer service has to be top notch.”

While large Internet companies on this list such as Amazon, Youtube, and Google do not have customer facing brick-and-mortar locations, interactions of customers with employees are a key factor in customer satisfaction in most other businesses. Friendly and knowledgeable staff matter most in customer service to more than half of survey respondents. Unsurprisingly, satisfied employees often translates to higher customer satisfaction. Many of the companies on this year’s Hall of Fame — notably Apple, Chick-fil-A, and Starbucks — score especially well in employee satisfaction on employee review website Glassdoor.

This is 24/7 Wall St.’s Customer Service Hall of Fame.

Victoria's Secret

15. Victoria’s Secret
> Pct. “excellent” ratings: 36.5%

More than three-quarters of Victoria’s Secret customers surveyed reported an overall positive experience with the company. Of those, nearly half gave the company an excellent rating. Many of the companies that earned the largest share of excellent ratings from customers also have a popular product, and Victoria’s Secret is likely no exception.

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L Brands, the store’s parent company, reported an increase in revenue from $10.8 billion in fiscal 2013 to $12.2 billion in 2015. With its success driven largely by the Victoria’s Secret brand, the company announced plans to open a net of 13 new stores in 2016, increasing its total retail square footage by 4% nationwide.

Victoria’s Secret currently has more than 1,100 brick-and-mortar locations. The company also offers customers a 24-hour a day customer care phone line as well as an online customer care chat service.

Starbucks

14. Starbucks (NASDAQ: SBUX)
> Pct. “excellent” ratings: 36.5%

Next to product quality, the most important element in a restaurant’s success is the customer experience, which Starbucks CEO Howard Schultz has cited as the driver of the company’s continued growth. According to Schultz, key reasons behind the company’s high customer satisfaction are the Starbucks rewards loyalty system and comprehensive online engagement.

On its suggestion portal MyStarbucksIdea.com, which Starbucks launched in 2008, customers posted more than 230,000 ideas and voted more than 2 million times. The idea of free Wi-Fi, which is now available at every company-owned location, was crowdsourced through the website. An early version of the company’s mobile payment system was also the result of the crowdsourcing platform. The company launched its latest version, the Mobile Pay & Order application, in stores nationwide last September. The app allows customers to order and pay for their drinks before entering the store and ultimately helps to shorten lines and wait times. The mobile application is now used for more than 20% of all transactions and is expected to handle more than 50% in a few years.

Another potential reason for the high customer satisfaction at Starbucks is the high satisfaction among its employees. Starbucks employees reviewing the company on Glassdoor frequently cite friendly interactions with regular customers as a major benefit to working at the cafe restaurant. Starbucks has one of the highest employee satisfaction scores of any company on Glassdoor.

Hilton brand logo Hotels & Resorts

13. Hilton
> Pct. “excellent” ratings: 37.0%

The hotel industry is one of a handful where 75% or more of survey respondents claim to have an overall positive experience when dealing with companies within the industry. Like the industry as a whole, Hilton, in its fourth appearance on the Customer Service Hall of Fame, ranks as having some of the best customer service. Roughly 87% of survey respondents reported a positive overall experience at Hilton hotels, and 37% reported excellent customer service specifically.

With more than 4,700 locations globally, Hilton is the second largest hotel operator in the world. Only Marriott, after its merger with Starwood Hotels & Resorts Worldwide is completed, will own more properties.

Approximately 55 million people are members of Hilton’s customer loyalty program. Members, who are likely treated with the best of Hilton’s already highly regarded customer service, accounted for more than half of the hotel company’s system-wide occupancy in 2015.

American Express logo

12. American Express   (NYSE: AXP)
> Pct. “excellent” ratings: 37.9%

American Express offers a range of personal and business credit cards with a variety of exclusive benefits and services. It is the only credit card company in the Customer Service Hall of Fame. While other credit card companies, such as Wells Fargo and Bank of America, have some of the lowest customer approval ratings, 37.9% of surveyed American Express customers reported an excellent experience with the company, a larger share than all but a few other major brands.

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While most companies emphasize customer service as important to their brand, American Express appears to better hold up to its commitment. The company seems to have improved its customer service markedly in recent years. In 2013, 14% of survey respondents rated their customer experience with American Express as poor, landing the company on the Hall of Shame. This year, only 11.3% of customers reported an equally negative experience with the company. To date, American Express is the only company to have ranked in both the Hall of Fame and Hall of Shame.

YouTube

11. YouTube
> Pct. “excellent” ratings: 38.0%

While some companies with the highest customer satisfaction ratings have been around for over a century, YouTube is barely a decade old. While face to face customer interactions are common at a number companies on this list, YouTube’s product and service are relatively intangible. The website serves as a platform for users to share and watch videos.

Internet giant Google bought the company in 2006, and within a year began to carefully roll out advertising on the site in such a way that did not detract considerably from the user experience. With advertising, YouTube has turned into a major profit generator.

Some of the 38% of survey respondents reporting an excellent experience with YouTube may have even profited financially from the brand. There are many ways YouTube users can make money, including fan funding and hosting corporate advertisements. The site even offers a free online course for contributors interested in submitting content to turn a profit.

UPS Logo

10. UPS (NYSE: UPS)
> Pct. “excellent” ratings: 38.6%

What eventually became United Parcel Service, the largest package delivery service in the world, began in Seattle in 1907. Though the company can trace its roots back over 100 years, it did not go public until 1999, right before the rise of e-commerce, which drastically increased the brand’s exposure and ubiquity.

Today, UPS customers can track their packages and confirm shipment deliveries online. The company also invests in technology to increase efficiency and ultimately the customer experience. Tens of thousands of UPS trucks are equipped with tracking technology that measures and records more than 200 elements, including speed, overall vehicle idle time, and oil pressure. The company also uses navigation systems that use algorithms to determine the optimal delivery route.

More than 85% of survey respondents this year reported an overall positive customer experience with UPS, with more than a third of those respondents rating their experience as excellent.

FedEx

9. FedEx  (NYSE: FDX)
> Pct. “excellent” ratings: 38.8%

FedEx is a private sector alternative to the much maligned United States Postal Service. The company offers a range of services to meet the shipping needs of individuals and businesses. This year, 38.8% of survey respondents reported an excellent experience with the company, a larger share than all but few other major brands.

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To meet anticipated growing demand from e-commerce, the company has been investing in capital and infrastructure in recent years. In fiscal 2016, the company invested $1.6 billion in FedEx Ground, its North American package delivery division. The company also added 17 Boeing 767 freighters to its FedEx Express division, the company’s global shipment arm.

In addition to its customers, FedEx is leaving its shareholders satisfied. The company’s stock has appreciated 12.7% in value over the past 52 weeks.

Netflix

8. Netflix  (NASDAQ: NFLX)
> Pct. “excellent” ratings: 40.2%

Internet television streaming company Netflix has grown rapidly since the rollout of its streaming service in 2007. Today, more than 75 million members around the world consume over 125 million hours of TV shows and movies daily. In the U.S. paid memberships increased by 19% and 15% in each of the last two years. Having a popular product or service certainly helps a company stay in its customers’ good favor. The growing member base reflects what is likely an overall positive experience with fewer complaints among customers.

Netflix’s business depends closely on broadband network providers such as Comcast, which are generally much less favorably regarded. The public opinion gap between two such closely related businesses is partly due to which company the customers usually hold responsible when problems occur. When a video freezes or performs poorly, most consumers likely blame their broadband providers.

The net neutrality rules the Federal Communications Commission approved in February of last year highlight the expectations of customers using these companies’ services. The rules, which were designed to protect consumers and web content companies such as Netflix, prohibit Internet service providers such as Comcast, Verizon and Time Warner Cable from blocking, slowing down, or favoring certain web traffic.

Google Logo

7. Google 
> Pct. “excellent” ratings: 40.9%

Public holding company Alphabet, formed in August 2015, now controls Google, by far its largest asset. Google generates revenue primarily from online advertising. According to the company, Search, Android, Maps, Chrome, YouTube, Google Play, and Gmail have more than 1 billion active users each per month.

Google’s services, which are completely free for non-business users, are very popular and apparently also quite lucrative for its advertising clients. Google’s mobile operating system Android powers the vast majority of all new smartphones. In the most recent quarter, Alphabet reported a 24% jump in profits, attributing the strong growth to Google’s focus on mobile advertising.

The Internet behemoth operates at such a large scale that even the U.S. government appears to be a satisfied customer. To help President Barack Obama’s administration facilitate the restoration of diplomatic relations, for example, Google dramatically improved Internet access in Cuba. Also, Google partnered with the U.S. Department of Housing and Urban Development to bring Google Fiber to public housing.

Sony Logo

6. Sony  (NYSE: SNE)
> Pct. “excellent” ratings: 41.1%

More than two in five survey respondents consider Sony’s customer service to be excellent, the sixth largest share of any company. As a manufacturer of consumer electronics, Sony not only needs to produce quality products, but also provide helpful support services. Sony has 534 customer support offices in the United States and receives roughly 1.8 million customer inquiries a year through either e-mail, phone, or chat services. Some of Sony’s flagship products include the Handycam camcorder, Xperia smartphones and tablets, and the PlayStation gaming console.

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Sony’s customer satisfaction remains high despite a string of security issues with its online PlayStation Network. The incidents began in 2011, when a massive hack caused a month-long outage and a leak of tens of millions of users’ account details, including credit card information. The hack was one of the largest cases of data theft in history. As a result, Sony agreed to a $17.8 million settlement with affected users. Sony also gave victims access to free game downloads for the PlayStation 3 and PlayStation Portable.

Samsung Logo

5. Samsung Electronics
> Pct. “excellent” ratings: 43.2%

This year, 43.2% of survey respondents rated Samsung Electronics’ customer service as excellent. Samsung is a manufacturer of consumer electronics, and its customer satisfaction largely depends on the quality of its products as well as its support services. Unlike its competitor Apple, Samsung manufactures smartphones with an open operating system, meaning developers can make changes to the device’s source code without the assistance of a Samsung representative.

While Samsung is still behind Apple in customer service, it does slightly better in product quality. The Samsung Galaxy Note5 ranks highest on American Customer Satisfaction Index list of top smartphones by customer satisfaction. It is followed by the iPhone 6s Plus, which is trailed closely by Samsung’s Galaxy S6 edge+ and the Galaxy Note 4. High regard for Samsung products and customer service is likely driving sales. Samsung phones made up 22.3% of all smartphones shipped worldwide in the second quarter of 2016, the largest global market share of any company.

Marriott Hotel

4. Marriott
> Pct. “excellent” ratings: 44.7%

Roughly 45% of surveyed customers consider the customer service at Marriott to be excellent, the largest share of any hotel and the fourth largest of any company nationwide. On the same survey, respondents cite having a friendly and knowledgeable staff as the most important elements in quality customer service. This is likely the case at Marriott, where employee satisfaction is among the highest of any company. Writing on Glassdoor, Marriott staff frequently note abundant learning opportunities and great coworkers as major benefits of working at the company. The average tenure of a hotel manager at Marriott is 25 years, far longer than the average tenure across all hotels. Employees who are with the company for longer than 25 years are eligible for free weekend hotel stays for life.

Marriott guests are also some of the most loyal in the hotel industry. The Marriott Rewards program has roughly 55 million members and more business travelers than any other rewards program. According to a recent study by market research firm J.D. Power, members of Marriott Rewards are more satisfied with their rewards program than the members of any other hotel loyalty program.

Apple Logo

3. Apple  (NASDAQ: AAPL)
> Pct. “excellent” ratings: 45.4%

More than 100 million Americans currently have an iPhone, roughly 43% of the U.S. smartphone market. Unlike the Android, the iPhone’s iOS is a closed system, meaning developers cannot make changes to the device’s source code and have limited freedom when developing applications. The closed system is fundamental to the simple design and user interface that has won Apple so many loyal customers — but also may make some Apple customers more dependent on company support services.

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Apple’s in-store customer service is hosted at its Genius Bars, where trained staff members offer product support and guidance. Apple also has 28 customer service call centers with approximately 19,000 employees. Although outsourcing its call centers would have been cheaper, Apple keeps its call centers within the U.S. to ensure quality assistance. The strategy is likely working as 45.4% of customers believe Apple’s customer service is excellent, the third largest share of any company.

Apple’s products and product support have managed to create some of the most loyal customers of any company. On a recent survey conducted by RBC Capital Markets, 83.4% of iPhone owners claim their next smartphone purchase would be an Apple product. Meanwhile, 64.2% of Samsung Galaxy owners claim the same about Samsung. In the fourth quarter of 2015, 30% of new iPhone purchases were by customers switching from Samsung to Apple.

Restaurant Chick-Fil-A

2. Chick-fil-A
> Pct. “excellent” ratings: 48.9%

Nearly half of survey respondents consider Chik-fil-A to have excellent customer service, the second largest share of any major company. The restaurant chain employs a number of strategies to ensure quality customer service. Chick-fil-A spends more than $1 million each year in evaluating its service and honing the four elements the company believes are important for customer retention: taste, speed, cleanliness, and courteousness. Intended to create a more personal experience, employees end transactions with the phrase, “It’s my pleasure,” instead of “thanks,” or “you’re welcome.” When a new store opens, Chick-fil-A invites regulars from nearby locations and other Chick-fil-A fans to a free dinner before the grand opening. The restaurant also gives these customers 10 free meal coupons and asks them to spread the word about the new store.

High customer satisfaction has helped Chick-fil-A become incredibly popular in the past few years with current annual sales nearly double what they were in 2009. The average store earns roughly $4.2 million each year — more than McDonald’s, Starbucks, or Subway — despite doing business only six days a week.

Amazon.com

1. Amazon  (NASDAQ: AMZN)
> Pct. “excellent” ratings: 61.2%

Amazon is again the No. 1 company on the Customer Service Hall of Fame, with 61.2% of survey respondents reporting an excellent experience. A sign of the changing consumer landscape, there are few, if any, customer-facing Amazon locations. While this is not necessarily an advantage in terms of customer service, it means unlike other retailers, Amazon is not associated with long lines or interactions with employees.

Amazon’s highly praised customer service is likely a reflection of its priorities. Recently, the Internet retailer has put customers before profits. While Amazon was profitable in 2015, it lost money in 2014. Amazon’s business model is frequently described as providing a wide variety of merchandise at a low-cost with an emphasis on convenience — all to preserve customer loyalty. The first of the company’s guiding core principles is: “customer obsession rather than competitor focus.”

Methodology:

24/7 Wall St. commissioned Zogby Analytics to conduct an online national survey of more than 1,500 randomly chosen respondents to rate customer service at 151 of the best-known companies in the country. Seventeen industries are represented in the study.

Respondents were asked to evaluate customer service quality as “excellent,” “good,” “fair,” or “poor.” Of the 151 companies, 112 had at least 500 valid responses. We did not consider companies with fewer valid responses.

When a company with multiple divisions scored as one of the best or worst for customer satisfaction, we listed the company only once in our rank.

The 15 companies with the highest percentage of “poor” responses represent our Customer Service Hall of Shame. Using the same methodology, the 15 companies with the highest percentage of “excellent” responses became our Customer Service Hall of Fame. This is the third year 24/7 Wall St. has conducted this study.

I was not surprised when I saw which company is tops in customer service. That's one of the reasons I love them.

Helen Little

Helen Little

Listen to Helen Little weekdays from 9:30am-3:00pm and tune in to her Public Library Podcast on the iHeartRadio App! Read more

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