In a recent article on Forbes.com, Rick Ungar provides an interesting juxtaposition of the stellar success of CostCo versus the anemic growth of Wal-Mart. The result is a portait of how CostCo’s success is inextricably tied to how it treats its employees, and how that treatment creates a positive customer experience. CostCo’s brand of “ethical capitalism,” however, is in stark contrast to Wal-Mart’s model, which lies somewhere between feudalism and indentured servitude. Apparently jealous of the customer service awards received by Comcast, America Online, Electronic Arts, and Bank of America, Wal-Mart has set out to ensure that no company can compete with it, especially in the arena of poor customer service.
In an effort to increase profits and reduce employee benefits, Wal-Mart has cut employee staff, pay, and hours so that many of its employees are able to qualify for Medicaid. A study found that a single Wal-Mart superstore with 300 employees can cost taxpayers as much as $1.7 million. With a little over 3,000 superstores in the United States, this means that taxpayers could be subsidizing the healthcare of Wal-Mart’s employees to the tune of $5.1 billion a year. Essentially, Wal-Mart uses state-supported healthcare in lieu of providing quality wages and affordable employee benefits.
This is not about whether or not the government should provide healthcare for those in poverty, or whether a company has a moral obligation to provide healthcare to its employees. Those are questions best left to pundits and activists. However, it is undeniable that a company’s success is tied to its customer service. All the behemoth companies listed above did not start with terrible customer service. They grew to be that way. The only thing keeping them afloat now is their size and sheer tenacity. A small business must look to these companies as examples of what NOT to do. If you want to have good customer service, you must have satisfied employees with good morale. One cannot run a company based on the motto: “The beatings will continue until morale improves.”
Consumers can expect to be treated with the same level of respect and dignity that an worker receives from his employer. In other words, treat your employees in the same way you want them to treat your customers.
Robert S. Bexley, Attorney
Bexley Law Firm, LLC