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I realize that there are exceptions to this rule, such as with high end/boutique establishments, but as a rule, would you concur that generally, if a company has a reputation as having rude, hostile, or indifferent service that it's probably a company that's raking in the profits? Think Wal-Mart Conversely, if a company tries to go out of its way to be friendly, helpful, and do anything it can to lure you in, that they are likely hurting financially? Think Robinsons-May before they bit the dust.
Classic example of this would be United Airlines. Back in the late 1990's, they consistently ranked as both one of the most profitable airlines and simultaneously, one of the worst for on time records, surly and stoic staff, and so forth. Then, post 9/11, when their balance sheet absolutely fell on its rear end, they rolled out the 'Come Fly With Us' (in essence bringing back the 'Friendly Skies' campaign from the 60's ad 70's, when they really were a great airline to fly). And it worked. At least in the short term: both reputation and profits went up.
So is that a rule to live by? That if a company treats you like crap, they are financially solid (and perhaps a good investment)? And if the staff seems a little too desperate to kiss your rear end, that you can probably score big-time discounts from them?
The root problem of you assumption really goes to something that concerns philosophers like David Hume and Immanuel Kant -- is it part of human nature to treat others well or is there some fundamental ulitity that is met through actions that maximize happiness...
Fundamentally organizations that exist for commercial purposes must react to market forces. It is not a suprise that high end establishments thrive by providing great service and discounters can get by with much less.
I would argue that it is not the same thing to categorize firms that once were good at customer service and subsequently took a turn for the worse struggling to return to good graces in the either category -- instead most investors and business school types say such "turn arounds" are either an opportunity for firms to add value OR fail -- it is the kind of a "do or die trying" situation and chances of it stopping the death spiral are not great...
There are so many ways to run an exceptional business! There is no need to have poor customer service. Quite the opposite, many well run firms know the way to NOT have to deal with a risky "turn around" is to strive to have HIGH LEVELS of customer service AND continually address was to have satisfaction INCREASE. Even the easy to dislike WalMart really does take steps to make stores that customers want to shop in / spend more money at! Read the books by Tom Peters or check out his web site -- he has been making a living for more than THREE DECADES showing firms how to do things RIGHT -- like managers WALKING AROUND and actively MANAGING employees instead of hiding in offices and spitting out reports...
Chett is correct. Correlations like you are trying to make are like pegging the price of apples to the size of apple trees.
Profit is dependent on a huge number of factors, and to single out one as being the significant factor makes little sense unless there is clear data that indicates it.
Winn Dixie used to have really good service. As it started having financial difficulties, the service switched to terrible for a few years before it went bankrupt. General Cinema was a hidebound company that drove itself into the ground even while attempting to have good customer service.
Supplier cost, real estate cost, payroll cost, debt service cost, insurance cost are all factors and they all fluctuate. Any one of them can tip a company into bankruptcy.
That's because in the airline industry, at Wal-mart, and lots of other industries, many people will sacrifice good service just to get the cheapest price.
In order to be the "cheapest" but still show a good profit, an industry has to cut the most obvious and easiest and place to show a profit, and that is on payroll and employee benefits. This leads to employees who are feeling overwhelmed, overworked, underpaid, and under-valued. That can't help but carry over into your customer service experience.
Find me a company where employees are treated with at least a little dignity and fair compensation, and I'll show you a company where you will most likely receive better customer service - and you may have to pay a little more than rock bottom price to get it.
And the popular notion today that "at least they have a job?" Forget it. There is no getting around human nature.
Far too many variables to say yes/no to your example.
Being nice doesnt equal desperation by a company. As one of my customers have told me, I am Anxious to please. Treat others as you would want to be treated, good or bad situation. I want my customers to understand I care and stand behind what I sell. There is only one way to do that.
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