Customer Service Survey Places Apple Second To Last
The vaunted customer service chops of Apple Stores may not be what they once were. A new retail survey of 10,000 U.S. shoppers placed Apple (NASDAQ:AAPL) second-to-last in customer experience, just slightly better than RadioShack (NYSE:RSH). Is Apple a victim of its own reputation? In other words, are its fans' expectations now so high as to be unreachable, delivering disappointment?
Another surprise: Ace Hardware placed third, beating out customer service king Nordstrom (NYSE:JWN) by one notch. Amazon (NASDAQ:AMZN) and Sam's Club (NYSE:EMT) were the only retailers to achieve better customer service scores.
Other top customer service performers according to the survey are, in order: PetSmart (NASDAQ:PETM), BJ's Wholesale (NYSE:BJS), Walgreens (NYSE:WAG), AutoZone (NYSE:AZO) and Home Depot (NYSE:HD). Weak performers include: JCPenney (NYSE:JCP), Marshalls (NYSE:TJX), Gamestop (NYSE:GME) and 7-Eleven. (Note: JCPenney has the distinction of being the retailer that suffered the largest drop in customer service ratings from last year to this year. JCPenney dropped 6 percent. The biggest retail gain during the same period? Office Depot (NYSE:ODP), which boosted its score by 11 percent.)
Customer service is one of the hardest things to reliably, consistently, accurately and—here's the hardest one—meaningfully measure in retail. But this study looked at the behaviors and reactions from 10,000 U.S. consumers, giving some broad hints as to where some retailers are faring well—or not so well.
On the "better at customer service" side, Sam's Club, Amazon, Costco and Nordstrom were at the top—and there are good reasons for that—along with Ace Hardware. The bottom of the list is more intriguing. RadioShack fared the poorest and Gap (NYSE:GPS), Best Buy (NYSE:BBY), Walmart (NYSE:WMT), TJMaxx (NYSE:TJX) and Ross Stores (NASDAQ:ROST) were right near the bottom. But that second-lowest ranked chain is the Apple Store, despite its legion of fans and its highly regarded sales associates.
The report, from the Tempkin Group, tried putting some of the chains into historical context by, for example, pointing out that RadioShack is hardly a newcomer to the poor customer service game. "Radio Shack is the lowest-rated retailer for the third consecutive year and 191st overall in 2013. The retailer is also the lowest scoring across all three underlying components, functional, accessible, and emotional," the report said. Report author Bruce Tempkin (the firm's managing partner) added: "The retail industry remains one of the better sectors for customer experience, but RadioShack is a real black sheep in the industry."
Amazon and Sam's Club were essentially tied for first place. They ranked number one for retail and were tied at fifth for the best company overall, from all sectors. But because of the way Tempkin splits up categories, retail fared much better than that. Several top retailers in grocery topped the list of all companies—for customer service—and were separated into a grocery category. The top company of all types for customer service, according to the survey, is Publix; the second is Trader Joe's and the third is Aldi.
The report's methodology was a Web survey of pre-selected groups of shoppers. Tempkin Group only considered answers from shoppers who met "age, gender, income, ethnicity, and geographic" prerequisites that matched U.S. Census data. The 10,000 respondents are how many remained after the filtering.Shoppers were asked to rate experiences from the prior 60 days. "While consumers rated many companies, we limited our analysis to only those 246 companies across 19 industries for which we had responses from at least 100 consumers."
When it comes to online survey methodology, Tempkin Group's approach sounds as good as any. But it suffers from the same contextual problems as similar surveys. Assuming that these people are self-reporting their specs accurately and that no one is trying to game the system, the survey is still dependent on frail memories of shoppers about experiences during the prior two months.
Those recollections can be colored by quite a few things. Let's say someone has to wait a long time in an Apple Store to get an associate's attention and then the associate couldn't answer several key questions—or answered them incorrectly. As a result, the wrong unit was brought and other customer service problems materialized. But the product worked great at home, and the shopper is now in love with her iPad. Those favorable feelings are very likely to color her recollections and, hence, her answers. The same thing works in reverse. If you're Target (NYSE:TGT) and you're trying to improve your customer service performance, you want to know customers' reactions on the day of the purchase, which is when store customer service is likely to be the key factor in their assessments.
Questions need to differentiate between what store associates are doing to help the sales process (and certainly post-sales assistance can be key) and customers' feelings about the product purchased two months later. That said, this particular battle of reality versus perception may be won by perception. If Costco (NASDAQ:COST) customers in March think they had a bad customer experience in a store back in January, it doesn't matter whether they really did. Their behavior will be dictated by their perceptions and recollections.
The real problems with reports like this—and the Tempkin Group offering appears to be one of the better entries—is that the answers are not nearly specific enough to be actionable. For example, why did Apple do poorly and Ace Hardware perform so well? Without follow-up questions that delve into specifics, the datapoints are interesting but, ultimately, not that useful.
Tempkin dubbed the performance of both Apple and Ace as "surprises," but he could only guess as to the reasons. "Ace Hardware was a surprise, but I think the store franchise structure leads to more personal service. I think the interesting item is comparing Sam's Club to Nordstrom. The lesson is that customer experience is about consistently living up to brand promises, not about trying to replicate how other companies deliver their experience. Sam's Club does that well," Tempkin said, adding that Apple's surprise might be explained by unmet expectations. "It could also be that Apple has a very avid fan base in some segments and not so much in others."