The likely connection between Profitability and Good Customer Service

ka-ching! : An imitation of the sound made by a cash register, used when someone’s action will result in more money.
Wow! : In this context, the exhaled sound from a delighted customer walking away from the transaction. Usually precedes the Ka-Ching.

Click to enlarge

So the greats (Amazon, Zappos, Apple, Southwest) easily manage both on the above two sounds with reassuring frequency.
The Losers (Go Air India!…or any state managed or funded institution) easily manage the other end of the equation. Communism is an ode to this quadrant.

Interestingness as always is on Quadrants 2 and 4 (top left and bottom right)

Your local bookstore (Coffee shop? Lending library ?) may not be raking in the moolah but you and I sure damn love them don’t we ?! (remember Meg Ryan’s store in ‘You Got Mail’ ?)

And when you have a quasi-monopoly or a govt granted one, profitability can be had even if customer respect is forever elusive. On a longitudinal scale, sustainability is hardest I suspect for THIS category.

And the incompetent managers of the Air Indias of the world need to know pumping money without any real focus on improving customer service is a definition of ‘hopeless financial black hole’ (heard the phrase ‘Putting house before cart?’)

Now my last contention is the Greats have a different more subtle challenge. Everyone falls for the universal lie that a profitable company just totally needs to grow (bloat) on and on and keep at this growth. So the profits fund that. But great customer service is based on a very ‘intimate’ hard won culture nurtured by the early folks and it gets more diffused due to this growth. A real paradox. Few companies can manage the balance. MOST lose the way somewhere. You want to be as small as possible and as big as necessary. The puzzle is not about scale; it’s about scalability. Read Gibbon’s ‘Decline and Fall of the Roman Empire, Vol. 1’ for more on what happens when original culture binds no more and you can’t scale.

So now this above is THE challenge to the winning CEO, not just dealing with the more easy decision of where to open the next outlet.

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