Customer Service and Financial Return

 
 
 
 
Are there financial benefits for companies with good customer service representative records (CSR), and can good CSR policies actually boost share prices and have a positive impact on the bottom line?

Most certainly, good CSR policies can have a positive impact on the bottom line, which in turn, can boost share prices. The financial benefits of good CSR policies are numerous and multifaceted. For example, good CSR policies can lead to increased revenues (as service is a key component to every business' success), and reduced costs through improved efficiencies both of which drop to the bottom line. Michael Dell, for example, built his multibillion-dollar enterprise by promoting superior customer service as one of its key competencies (the others being mastery of the value chain and superior logistics).

When the bottom line is increased through measures such as superior customer service, the secondary market tends to react favorably because investors view this increase as sustainable over the long-term. (In comparison, a layoff announcement has a temporary positive impact on stock price because it is a temporary means of boosting the bottom line, but it is not a sustainable long-term strategy.)

In general, any strategy that can increase revenues or improve operational efficiencies as a long-term strategy (such is the case with superior customer service) will improve the bottom line, and consequently could boost stock price.

How do law and ethics differ? How are they


     
 
 
 
    

 

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