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Customer Service Can Be as Important as Price

23 Dec, 2002 By: Stephanie Prange

Shopping Wal-Mart during the holidays is an adventure. The hunt for the elusive DVD section amid the tires, cosmetics, clothes and car batteries can take some time. While many may be willing to embark on that safari to save a few bucks, time-strapped parents like me often find a little customer service worth the extra cost.

Recently, I had a discussion with some salespeople in the hypercompetitive telecommunications business. That business has hit such hard times that prices are about as low as they can go. But one salesman mentioned he had made a deal with a customer recently, stealing him away from the competition not with a lower price, but with the promise of better customer service. During the sales call, the customer dialed up the customer service line and got a live body on the phone. That call sealed the deal.

As prices head for the floor in all business, including the sellthrough video business, this anecdote offers some solace to those competing with the big chains. Most retailers are competing on price. Blockbuster is promising to match any competitors' advertised price, and Wal-Mart is selling DVDs for under $10. Customer service often goes by the wayside in the race to the lowest price. Kmart is a perfect example. That chain chose to compete with Wal-Mart on value and let its customer service suffer. The result: stores in disarray, uninformed clerks and a generally unpleasant shopping experience that sent the chain into bankruptcy. Last week, the chain's rock bottom stock was delisted from the exchange.

Service has a value as well, especially when customers' time is at a premium. Retailers who recognize this will likely be rewarded because not everyone wants to hunt for DVD bargains in the forest of items sold at mass merchants.

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