Does It Pay to Treat Your Customers Poorly?


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I came across an article yesterday in Bloomberg Business Week that was very disturbing in its implications. The title is Proof That It Pays to Be America’s Most-Hated Companies. Its key message is that measures of the American Customer Satisfaction Index have virtually no correlation to stock market returns (at least for 2013, the only year shown). In fact, a regression line actually shows a very slight negative correlation.

“The companies you hate are making plenty of money. In fact, the scorned tend to perform better than the companies you like.”

The implication, of course, is that treating customers poorly is not bad business, and might even be smart business because of the money they save on luxuries such as good service, responsiveness, and actually being nice to people.

I would like to think the implications of the data are wrong. With only one year’s worth of data, it’s possible; maybe 2013 was an anomaly. Maybe it only applies to B2C companies. Maybe the old saying about any publicity is good publicity is true, and the companies everyone complains about are the most well-known, so everyone buys their shares. Maybe they provide superior value to customers in other ways, so they can get away with not being nice. I don’t know; I’m sure readers of this can suggest other explanations.

I have to admit that this article jolted me a little bit, because one of my most cherished principles and key themes of this blog, is the crucial importance of customer focus and treating them right.

But another side of me was actually pleased to get the information. It’s healthy to have your most cherished ideas challenged occasionally, and to get a reminder that the world is not as simple as we try to make it. It keeps us from locking in to rigid certainties that stop growth and learning. It preserves a touch of skepticism and humility. It reinforces the fact that in persuasion, there are no absolutes.

If nothing ever surprises you or challenges your thinking, you either know everything there is to know, or you’ve simply stopped looking.

What do you do when you encounter contradictory information?

  • Ignore it?
  • Attack it?
  • Think about it?

On a slightly related note, I’ve been writing about entrepreneurs and intrapreneurs recently. They succeed precisely because they challenge conventional wisdom.

Republished with author's permission from original post.

Jack Malcolm
Jack founded Falcon Performance Group in 1996 specifically to combine his complex-sale expertise and his extensive financial background to design and implement complete sales process improvement initiatives at top national and international corporations.


  1. Jack: like you, I believe it's healthy to challenge assumptions. Over the years, I've learned to dismiss articles that gratuitously proclaim the writer’s inerrancy through their inserting words such as laws, rules, or immutable truth into the article title. I know it sounds mealy, but I’m far more comfortable with the couched uncertainty of guideline or recommendation.

    For the same reasons, I think the Bloomberg / Business Week article can be similarly discredited. The offending word here is the first one in the headline – "Proof.” That's self-serving, inflammatory [malarkey]. To be charitable, I'd call this headline an interesting, quirky idea, and leave it at that.

    In the short run, the article is inconsequential, and I think it's silly to get worked up over it. I don’t see the story inspiring any CEO to feel entitled to run his or her company like the next Ryanair.

    There are still some assumptions that I think are not only safe, but ethical: treating customers with respect and dignity is not a bad business practice. I'll take that one with me to the bank, but I'll stop short of calling it an immutable truth. Seinfeld’s famed Soup Nazi was based on a real person who ran a fabulously successful restaurant in New York City.


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