No. 10: Southwest's secret is personality-plus
Low-cost carrier Southwest Airlines (LUV) attributes its customer-service success to personality . . . and free peanuts.
In hiring flight attendants, Southwest prizes people skills and even a flair for entertainment over experience, company spokesman Chris Mainz says. "We hire for attitude and train for skill. It all begins with the hiring and providing our employees with a culture where they feel comfortable being themselves."
Flight attendant David Holmes has become a poster boy for Southwest's hiring philosophy. Holmes became an online sensation earlier this year after a video surfaced of him rapping preflight announcements to the apparent delight of customers. Other Southwest flight attendants sing or tell jokes at the beginning of trips to lighten weary travelers' loads, Mainz says.
Southwest has also won fans for its refusal to charge for many of the items that were once freebies throughout the industry. It still allows customers to check two bags without incurring fees and provides complimentary snacks. (Southwest has never provided meals.)
The company ranks 10th in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with Southwest's customer service, 36.7% said it was "excellent."
In addition to the personality and peanuts, price is a third factor making Southwest a favorite among customers. The airline offers some flights for less than $50.
Together, the three P's helped propel Southwest to the best-10 list in this year's MSN Money-Zogby International poll.
No. 9: Costco keeps workers happy, too
Costco Wholesale (COST) attributes its customer satisfaction to its employees' compensation. The company pays its 145,000 workers nationwide an average of $19 an hour. That salary is more than 40% higher than the average paid by many Costco competitors, such as Wal-Mart Stores (WMT).
As a result, the employees are happier, stay with the company long enough to build expertise on the sales floor and treat the customers better, says Costco's chief financial officer, Richard Galanti.
"We have a philosophy, in terms of our employees, of providing a living wage and high-quality benefits," he says.
Costco prides itself on not asking its employees to pay more than 10% of their health care costs. When corporate executives realized in 2007 that employees had actually paid 12% of their health care benefits under a new company plan, Costco returned $8.5 million to employees, Galanti says.
Costco ranks ninth in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with Costco's customer service, 37.9% said it was "excellent."
The company's prices have also won Costco fans. Costco stocks its stores with bulk items that consumers can buy at discounts. It keeps its margins low in order to keep prices down and makes up the difference in sales volume.
Those low margins don't always make it popular with shareholders, Galanti acknowledges. But keeping Wall Street happy isn't the company's No. 1 concern -- it's fifth on a list of five top company goals, he says.
"What we do, we do for our customers and employees, and it pays great dividends for our shareholders," Galanti says.
No. 8: Apple puts geniuses to work
Apple (AAPL) hires geniuses. They may not be the certified Mensa sort, but they are readily available in Apple stores to fix your iPhone, your iPod or your Mac. If they can't fix it, and it's new enough, they'll often hand you a replacement device free, on the spot.
With only about 200 stores worldwide, many folks have never had the benefit of Apple's on-site tech support. But Apple also offers complimentary online and telephone customer support for the first 90 days after any purchase, enabling customers outside major metropolitan areas to get some genius attention.
Apple ranks eighth in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with Apple's customer service, 39.6% said it was "excellent."
Another aspect of Apple that has made its customers among the most loyal online (just check out this blog) is that its products are easy to use. The company, which did not return calls seeking comment, is known for its emphasis on simplicity and streamlined design.
"Apple's products . . . generally display an astonishing -- almost fanatical -- attention to detail that makes them not just easy to use, but a pleasure," Wired commentator Leander Kahney writes.
No. 7: Whole Foods sells 'peace of mind'
Unlike some other supermarkets on this list, Whole Foods Market (WFMI) hasn't won over consumers with low prices. Instead, it has created a loyal following by committing to sell high-quality food that's free of many additives and antibiotics that concern health-conscious customers. Whole Foods was named "America's healthiest grocery store" in 2008 by Health magazine, a fact it touts proudly on its Web site and financial statements.
"We do the 'homework' for our shoppers, giving them the peace of mind that our food is free of artificial flavors, colors, sweeteners, preservatives or hydrogenated fats," a company news release says.
Whole Foods' commitment to health and high-quality food comes at a cost: Its sales have declined this year as strapped consumers have sought to lower their grocery bills. But shoppers are as happy as ever with the supermarket chain.
"Everything you could possibly imagine to fit a healthy and fit lifestyle is in that place," wrote a self-described yoga instructor under the handle "Gigigalaxie" on nutrition Web site Calorie Count.
Whole Foods ranks seventh in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with Whole Foods' service, 40.5% said it was "excellent."
No. 6: Publix workers own the stores
Publix stockholders are the most important constituents in this supermarket company. But they're not average investors. They're employees.
"I think being employee-owned and -operated is a big secret to our success," spokeswoman Maria Brous says. "Our associates have an investment in providing good customer service."
Publix isn't public. So it doesn't sell stock on an exchange. But it does give every one of its 140,000 employees the opportunity to buy stock in the company after working one year and 1,000 hours. After working for three years, employees are fully vested and can sell their stock back to the company. The more customers Publix attracts to its 1,004 stores, located primarily in the Southeast, the more likely employees are to have an appreciating investment.
Brous also attributes Publix's success to discount programs intended to help struggling families afford the basics. One such program, called "affording the essentials is essential," offers discounts on such dietary staples as milk and cereal.
Publix ranks sixth in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with the grocer's customer service, 41.5% said it was "excellent."
No. 5: Nordstrom empowers salespeople
Nordstrom (JWN) hires nice people, spokeswoman Julee Kraus says. And it motivates those nice people to be extra-sweet by offering sales commissions. As a result, the employees who do well and stick with Nordstrom are those "who enjoy serving customers and really enjoy fashion, and are great sellers," Kraus says.
The company gives many of its salespeople the latitude to deal with customer complaints without running them up the management chain.
Nordstrom ranks fifth in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with Nordstrom's service, 42.2% said it was "excellent."
No. 4: Amazon wows with selection, shipping
Charlie Kindel loves Amazon.com (AMZN) -- and not just because his last name is nearly identical to that of the company's electronic reader. The tech blogger, who does not work for Amazon, regularly writes online about how great the company is simply because he thinks people should know why he loves it so.
What is it about a company that would turn a loyal fan into an online evangelist? Amazon didn't respond to calls for this report. But Kindel gives 10 reasons for his devotion in a blog post. Among them are the performance of the company's Web site, its seemingly limitless product selection and subsidized shipping.
Amazon considers its free shipping a form of advertising. In a filing with the Securities and Exchange Commission, Amazon said it had saved customers more than $800 million in shipping costs in 2008.
"It's partly in lieu of advertising," spokeswoman Patty Smith said last year, explaining the reasoning behind Amazon's shipping discounts. "That's what's going to keep the customer coming back."
Amazon ranks fourth in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with Amazon's service, 43% said it was "excellent."
No. 3: Netflix delivers movies in a flash
Rich Poinville recently watched "The Shipping News." Then the 40-year-old Netflix (NFLX) member shipped the DVD back and got a new DVD from his list of must-see flicks two days later.
"It's great," says Poinville. "They have hubs all over the country, it seems."
In fact, the company does. Netflix has 58 distribution centers across the country, enabling 97% of members to receive new DVDs the day after Netflix gets their returns, says Steve Swasey, the company's director of corporate communications. The company ships more than 2.2 million DVDs each day to a network of 10.3 million subscribers, he says.
Netflix ranks third in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with the company's service, 45.8% said it was "excellent."
In 2007, Netflix improved on its speed by offering a download rental service for members with high-speed Internet connections.
"The vast majority of folks are really happy with the service because we are that fast," Swasey says.
He also attributes Netflix's success with customers to its huge selection. The company ships out more than 95% of its 100,000 titles each month.
Selection and speed are the chief reasons the 10-year-old company has steadily grown subscribers and unseated Blockbuster (BBI) as the movie rental king -- at least in shareholders' eyes. While Blockbuster's stock flirts with penny status, Netflix shares have risen to more than $40 this year.
No. 2: Trader Joe's chooses products well
Trader Joe's owes its customer ratings to its cheese, chocolate cake . . . and the rest of its product selection, says satisfied shopper Lisa Hsu.
"Their products seem more carefully selected than those at other grocery stores," says Hsu, a 28-year-old New Haven, Conn., resident who drives 25 minutes past other supermarkets to shop at Trader Joe's. "The food they offer is different, interesting and good. I wouldn't say it is cheap, but it is also not superexpensive."
Trader Joe's ranks second in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with Trader Joe's service, 50.6% said it was "excellent."
Trader Joe's parent company, the German branch of Aldi markets, did not respond to requests for comment. But it's clear the company spends time on selection.
"We taste every product before we decide to sell it," boasts the company on its Web site, "and we guarantee you'll like it."
No. 1: USAA sensitive to military stresses
Kristen Miller had enough to worry about before the accident. The 28-year-old Kentucky resident had an infant to care for, a preteen to raise and a husband getting shot at in Afghanistan. So when her car was rear-ended last summer, Miller didn't want to spend much time settling an insurance claim. She didn't have to.
"I just had to call USAA and let them know what happened," says Miller. "It was so easy for me. They lifted it off my shoulders."
An insurer founded by military members who couldn't get private insurance, USAA is especially sensitive to the unique stresses involved in service life.
USAA ranks first in the 2009 MSN Money Customer Service Hall of Fame, a survey of 145 companies' service by Zogby International. Of respondents who said they'd had an interaction with USAA's service, 56.5% said it was "excellent."
USAA certainly isn't your average insurance company or financial institution. Its 7 million members are all in the military, former servicemen or family members of military personnel. Members are stakeholders. They pay premiums and are paid back a portion of the insurer's profits each year. (Last year, despite the market downturn, the company was profitable, and members received checks totaling $857 million.)
Unlike most banks, the company does not charge customers fees to use ATMs. It also reimburses fees charged by other banks for using their ATM networks. And it has mobile-banking applications that allow customers to bank from their phones -- a key perk for people who move often.
Spokesman Paul Berry also notes that the company didn't need Troubled Asset Relief Program funds and has never asked for any kind of a government bailout.
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Published June 10, 2009
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