Wednesday, August 13, 2008

Measuring Customer Service

After reading the current typist on Sears' Customer Service, I decided to try to get a big-picture of exactly how bad Sears' customer service is, and compare that to some similar big retail chains.

Let's start with some anecdotes:
  • Sears has at least one blog devoted to its demise, consisting of exactly one entertaining story.
  • One fellow converted to faith in Sears, but I'd say the credit for his good experience has more to do with his brilliant way of dealing with inept customer services than with professionalism on their end.
But everyone knows that anecdotes are only anecdotes. How can we measure the overall quality of customer service at a very large company? Consider the following:

Googling "Sears customer service complaints" (without quotes) gets 284,000 hits. The same for Wal-Mart gets 1,150,000 hits. For Target, 1,810,000 hits. For Ikea, 134,000. For Lowes, 388,000.

It wouldn't be fair to compare chains of different sizes, so we could partially correct for that by dividing these numbers by the 2007 annual gross revenue of each chain. So, dividing each of these number by the corresponding revenue, in tens-of-millions, gives the Freakwenter Index of customer satisfaction for these leading chains. Using revenue numbers posted on wikipedia, the first place prize goes to Wal-Mart (index of 29.6), second place to Ikea (46.9), third to Lowes (82.7), fourth to Sears (120.3), and dead last to Target (285.5).


Blogger current typist said...

Wow! I guess I can't love Target anymore.

2:20 PM  
Anonymous Dad said...

Interesting analysis. Why not divide by some other factor, e.g. number of stores?

6:19 PM  
Blogger My Freakwentness said...

The idea behind dividing by revenue is to control for the difference, between companies, in how many opportunities arise for customers to make complaints. It would be simplest if all the companies sold only washing machines (or any other single product) because than we could look at the number of units sold versus the number of complaints. So I don't think that the number of stores would indicate the number of units sold as well as revenue. Unfortunately, the fact that each of these companies probably sells a very different mix of goods, and certain groups of goods (such as more expensive ones and appliances) elicit more complaints than others, makes the index worth less. Moreover, the index might be doing more to measure the number of complaints that customer service receives rather than the quality of the customer service responses. More-and-moreover, the index fails to factor in the difference in the demographics of the shoppers of each company and how that affect the Google search: if one company tends to have older customers, perhaps a smaller portion of their customer service issues will appear through the series of tubes that is the internets.

6:22 AM  

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