LISSA’S: Wal-Mart’s Poor Customer Service Has Got to Go

Wal-Mart's Poor Customer Service Has Got to Go



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. An article from Bloomberg News went on to note that Wal-Mart's poor product quality has also hurt its customer satisfaction rate.

In an 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, especially in a period when retailers are already losing customers.



Having lost the battles on merchandise quality and customer satisfaction, Wal-Mart is left competing on price alone. This is certainly one of Wal-Mart's strongest attributes and one which might serve the retailer well in a period of economic weakness. But it means customers are only too eager to abandon the retailer whenever economically possible.

If it intends to stay competitive, Wal-Mart must improve its customer service, and that can only happen if it improves the way it treats its employees. Wal-Mart's personnel practices only compound problems with store format and product quality. Low wages, poor health care, erratic scheduling for store employees and years of union-busting have made Wal-Mart a leader in employee turnover and, once again, poor customer service.



source: Seeking Alpha