Wal-Mart’s Poor Customer Service Damaging Company Growth

Wal-Mart’s 4Q sales report highlights many of the problems facing the company: market saturation in the U.S., continuing problems with apparel and home goods and a weak economy that has customers using holiday gift cards to buy food.

Add to that: poor customer service. Wal-Mart scored the lowest of any retailer on the American Customer Satisfaction Index from the University of Michigan, earning it the title of “Worst Customer Service in America.” This is the second time Wal-Mart has earned the title in the last three years. The retailer’s grocery department has been at the bottom of the list every year since ACSI started tracking in 2004.

In this interview on CNBC, Claes Fornell of University of Michigan’s Business School explains that Wal-Mart’s poor customer service record is only going to hurt the company, especially in a period when retailers are struggling to maintain their customer base.

As we mentioned earlier, Wal-Mart must improve the way it treats its employees if it intends to stay competitive. It’s the only sustainable way to improve customer satisfaction, and will undoubtedly earn more money than it costs.

Posted by Alex Goldschmidt on Tuesday, February 19, 2008