Service Leaders Follow the Money
Service Leaders consistently have more revenue, make more money, plus have a stronger brand and market share. They dominate the market and crush their competition. In this issue I will share my ideas on Apple, Metro Bank London and my investment of $1000 each in 9 service leaders in May 2003.
Financially How do Service Leaders Do?
(Turning $9,000 into $29,000)
Everyone says we should focus on customer service but what is the financial impact on a firm that drives its business around customer service?
In May of 2003 I wanted to track monthly an investment in 9 service leaders. I invested $1,000 in each of them. During the last 11 years I have shared results from this investment with our readers and clients.
The values below are as of November 8, 2014.
| Company | 2003 | 2014 |
| Stock symbol | Investment | Value |
| Amazon AMZN | $1,000 | $9,596 |
| Costco COST | $1,000 | $4,787 |
| Home Depot HD | $1,000 | $4,268 |
| TD Bank TD | $1,000 | $3,420 |
| Dell (private) | $1000 | $460 |
| Southwest Airlines LUV | $1000 | $2,445 |
| Walmart WMT | $1000 | $1,756 |
| GE GE | $1000 | $1,361 |
| Jet Blue JBLU | $1000 | $904 |
| Total | $9,000 | $28, 997 |
Leaders Lead
As I have said before, a firm that can build a brand around the customer experience will increase its value by over 25%. The leaders at the top continue to prove the point. It is very difficult for most firms to keep their focus on a service strategy but not these guys. They are unrelenting in their focus on customer service. It continues to baffle me why other companies do not get it.
Results over 11 years
TD Bank – Vernon Hill sold Commerce Bank in 2007 to TD Bank. Had he still been running Commerce Bank it would have out performed Amazon. Commerce Bank for 4 years always out performed the other firms. Then it was sold and customer service is no longer king.
Dell- was one of the nine I selected. They lost their focus on customer service when Michael Dell retired in 2004 and put a financial guy, Kevin Rollins in charge. Dell returned in 2007 to rescue the company. Last year Dell went private and I got $460 for my $1000. It took 10 years for me to lose 54% of my money. Once Dell lost its focus and brand on service the value never recovered.
Southwest Airlines -For many years the airline stock did poorly. Most of this growth is in the last 12 months. They have never lost their focus on customer service.
Walmart – Sam Walton built a business around customer service and price. Starting with CEO Lee Scott in 2000 they focused on price and lost interest in customer service. They have record increases in sales since 2003. The market place places a much higher value on service leaders. Based on sales and profits Walmart stock should be triple what it is, I will repeat — The market place places a much higher value on service leaders. Walmart is no longer a service leader. Better than K-Mart but not much.
General Electric – Jeff Immlet, the CEO, has done a remarkable job of increasing his pay. He gets paid over $19 million a year ($7,380,000 as a bonus) In the US with executive pay there is often no relationship to results. GE results are average. GE, under Jack Welch was the best managed company in the world. GE has lost its customer service focus. One of its credit card divisions, Care Credit, has lousy customer service.
JetBlue -The company was built around great service. With the February 17, 2007 winter Valentine’s Day snowstorm where the passengers were kept on the plane for 13 hours they have STILL NOT recovered. The problem was NO service recovery. It was too little and too late.
Financial impact
The facts continue to prove the point…ONCE you lose your customer service brand it is difficult to keep the value of the company.
