By: The 2011 American Express/CFO Research Global Business & Spending Monitor

The competitive global marketplace appears to weigh heavily on many respondents’ attitudes toward customer service, a function that provided a valuable basis for competition during the downturn. A substantial number of respondents— one-third or more—from around the world say their companies are measuring various dimensions of their customers’ experiences more closely as a result of the downturn. (See figure.)
 

Historically, concern with customer-service improvement has been especially pronounced in mature markets, where companies are often not in a position to compete on price. The results of this year’s study suggest, however, that companies around the world—including companies in emerging markets that have historically based their strong competitive advantage on price—are turning their attention to customer service, with an eye toward investing in their ability to deliver the combination of price, service, and quality that increasingly savvy customers demand.

When asked whether they had changed their methods for measuring specific dimensions of customer service, for example, half of respondents based in Mexico say that their companies are more closely measuring the effectiveness of their spending on customer-service activities. At Grupo Herdez, the $850 million manufacturer of processed foods, based in Mexico City, CFO Gerardo Canavati says the company is planning to drive organic growth “through product innovation to keep customers engaged.” Competing on price in consumer products ultimately destroys value, he says. “We built brand equity to drive growth,” Mr. Canavati says. “The world is evolving, and companies that will be successful going forward will be the ones that adapt to the new environment and lead that change. We need a higher level of focus on product development and service.”

Companies located in other high-growth emerging markets are also turning their attention toward improving customer service. Fifty-three percent of respondents from India, for example, say that their companies are measuring customer retention and loyalty more closely as a result of the downturn. (A slightly smaller number [47%] of Indian respondents say their companies are measuring customer-service performance
more closely.) The results of this year’s study suggest that companies operating in countries that have traditionally served as hotbeds of low-cost manufacturing are climbing up the value chain to find a sustainable competitive edge.

The full American Express/CFO Research Global Business & Spending Monitor can be accessed here.