Apple’s Excellent Customer Service Makes the Stock a Buy

I don’t have any Apple (AAPL) products yet, not even a "Pod". However, I do use iTunes, but that’s not a product, it’s a service.

Anyway, last week I had an issue with purchasing iTunes gift certificates online. Although there was no helpdesk number to call – something that’s now common practice with companies – I did get to “chat” online with a customer service rep who promised to follow up through email…and actually did!

Not only was there a follow-up email, dude went back and forth with me on email until he confirmed I was satisfied with the problem’s resolution. I thought to myself, that’s what customer service is.

Now, AAPL does make cool products, but I don’t think that’s the sole reason for the company’s success. Excellent customer service has to be part of the reason.

I know what you’re thinking. Maybe the dude who attended to me had just reunited with his high-school sweetheart. Nah. I think great customer service is just how AAPL rolls; it’s part of their mojo.

I’ve been in their store many times and “test-driven” like 10 different Pods and Macs without buying a thing, and none of their people gave me as much as a “beat it” look.

Look, if you want to know how well or awful a company is run, just experience its customer service. And Wall Street knows this. That's why the stocks of well managed companies often command a premium in the market. Just compare the price/earnings (P/E) ratio of AAPL with those of its competitors.

Costco (COST) is another company that enjoys a higher premium than its competitors partly because Wall Street believes it's better managed.

I have thought about buying some AAPL (no pun intended), but my portfolio is already tech heavy – it’s 18% weighted in tech versus S&P 500’s 15%.

Furthermore, I am not a fan of “hardware” tech stocks, because they are more susceptible to commodity prices than their “software” counterparts are. This doesn’t mean I won’t buy or use AAPL products though.

If you’re looking to get into a tech stock you should consider AAPL. I admit customer service is a crude way to decide whether to invest in a stock, but it seems to be an accurate predictor of a long-term moneymaker.

When deciding whether to get into a stock, some investors look at fundamentals, others look at technicals. Now you can go one up on them by also looking at customer service.