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1-Year Return
Netflix (Nasdaq: NFLX)
**
43.4%
Amazon.com (Nasdaq: AMZN)
**
10.6%
Costco (Nasdaq: COST)
****
(34.9%)
Notice a couple of things here. First, CAPS members don't like Netflix and Amazon much better than Capital One or Comcast. Why is that? Well, remember that the ratings don't reflect the company's quality, but instead simply suggest the stock's potential to outperform the S&P 500 as decided by the CAPS community. So, investors might be bearish on some companies due in part to poor service, while they might be bearish on seemingly great companies simply because the stock price seems to have gotten ahead of itself. Amazon.com and Netflix are likely in that camp.
Second, good service by itself won't necessarily protect a stock from falling. Several of the top 10 companies, including Costco and Southwest Airlines , have suffered severe losses during the bear market.
What to do
Nevertheless, the positive impact of good customer service will inevitably have an impact on a company's long-term financial performance. Remember that good service is likely to keep and attract customers, while poor service is likely to drive some away.
Also, look for signs that companies are actually responding to bad customer service scores. Dell , for example, had poor customer service marks several years back, but has worked to improve them. Comcast has also been working on that, improving its call-center software and adding call centers. Both companies, along with many others, now routinely scan the Internet for people relating bad experiences, so that the wrongs can be righted.
So, when you go about your stock evaluations, spend some time looking at a company's customer service. It may make the difference in finding a great investment.
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