by Jim Rembach - Vice President, Customer Relationship Metrics
The stock market has seen a few gains over the past couple weeks. A few companies have
reported some positive results. How is it that a few are reporting positive results and
some are not? Well these days for the majority of companies reporting positive results
they were able to achieve these results by cutting expenses, including jobs. What
does it say to executives when a company cuts jobs and the stock goes up? Good Job,
right? Really? The stock market reacts positively or negatively on short-term results,
but it is long-term growth and stable leadership that allows companies to experience
long-term accumulation of shareholder wealth.
Since 1994 the University of Michigan has been conducting research that proves higher
customer satisfaction serves as a strategic business tool for gaining a competitive
advantage and increasing shareholder value. High customer satisfaction is a predictor
of consumer spending and corporate earnings. In the study companies that consistently
score in the top half of customer satisfaction have added 50% more market value than
companies scoring in the lower half. In simpler terms they sold more and grew.
For many companies the only interaction customers have with them is via a CSR in
a call center. The CSR is the Company. So how do you improve customer satisfaction,
which will translate into increasing your company's value? You have to make sure you
hire top talent and then you train them. This applies to front line staff and more
importantly their leaders.
This seems simple? So the dilemma is why when sales and profitability decrease one
of the first expenses leaders cut is training and development. Cutting or not providing
your people with education opportunities are a sure fire way to lose business to your
competition. You can also be assured that you will not reach your sales potential
and your top talent will leave for companies that will provide the training. The hole
will get deeper and wider. So when you are assessing what is the value of training,
project what an 8-year 50% growth rate would be worth. Based on your investment if
any body calculates anything less that a 500% ROI we would be very surprised.
