Or at least that part that talks about improving the bottom line through better customer service?

That’s the conclusion reported by Business Week on a survey of 146 publicly traded corporations. Basically, they found no correlation between customer satisfaction and YTD stock returns. For you geeks out there, the regression line was y = -0.6x+79.17, with R^2=0.018. What this means is that there is actually a slight negative correlation between stock market returns and customer satisfaction (that is, higher customer satisfaction scores are associated — very slightly — with lower stock market returns), but with an R^2  so near zero, a better conclusion is that there is no meaningful relationship.

What does this mean? For one thing, a glance at the list shows a heavy bias towards long-established companies: think Delta, JP Morgan Chase, etc. As far as the airline industry goes, once the US Airways – American merger completes, the remaining majors will be virtual monopolies in their home markets, with all of the incentives to improve service that monopolies usually have. As for most of the other companies, well, once you become a large, bureaucratic, publicly traded corporation, expenses like “customer satisfaction” often become costs to be minimized so as to pump up the bottom line (and executive bonuses). In other words, the survey may be biased towards corporate dinosaurs and not typical of the vast majority of business enterprises. If that’s the case (look over the list and decide for yourself), then good customer service might still be an important component of the strategies for most businesses.

To the extent my analysis is correct, up-and-coming companies that are not beholden to next quarter’s bottom line (and are not monopolies) have huge advantages. For the 146 companies on the list, you may be seeing one of nature’s recycling mechanisms at work.

What did Boyd say about customer satisfaction? Nothing. If you’re adventurous, you might try inferring something from his discussion of grand strategy, one purpose of which is to attract the uncommitted to our side — check out Patterns 139-144 and Strategic Game 53-57. [You can download all of Boyd’s presentations from our Articles page.]