Recently, I visited Pets at Home to purchase dog toothpaste, seeking guidance from a staff member due to my lack of expertise in pet dental care.

The staff member was exceptional—friendly, knowledgeable, and eager to assist by providing additional information. Consequently, I left the store after 20 minutes loaded not only with toothpaste but also with chews, treats, and a supplement that promised to improve Daphne the dog’s breath significantly.

I have since shared my positive experience with numerous acquaintances, praising the service at Pets at Home and confirming my intention to return. Additionally, I have enrolled in their loyalty app and, intriguingly, I am contemplating investing in their shares.

This line of thinking aligns with the strategy of the Carmignac Portfolio Human Xperience fund.

“Most consumers are willing to pay a premium for enhanced service or experience,” explained the fund’s manager, Obe Ejikeme. “While about 30% of people prioritize low costs—which benefits companies like McDonald’s and Ryanair—many value higher-quality service, allowing those businesses to charge more.”

Currently, around 80% of businesses in the United States incorporate some form of customer satisfaction score. Consider recent purchases—whether it’s a hotel stay, a meal, or a service from a local tradesperson; customer reviews are crucial.

Two decades ago, consumers had limited avenues to express dissatisfaction with poor service, but today, social media and review platforms provide a voice. Companies are recognizing the impact—and potential risks—of this shift.

“Amazon transformed the landscape with its five-star review system,” Ejikeme noted. “Technology has revolutionized the situation. Now, when I leave a one-star review, companies may reach out to understand what went wrong.”

The Carmignac fund, which launched four years ago, has achieved a 40.2% increase over the past two years, based on data from Citywire. It uses customer satisfaction surveys, employee engagement metrics, company filings, and news reports to assign an overall score for customer experience, with investments only considering firms scoring 30 or lower on a 100-point scale (1 being the best).

Amazon is a key holding in the portfolio, successfully retaining customer loyalty via its Prime membership, which offers free and expedited deliveries along with access to streaming services at a cost of £8.99 monthly. Prime members spend approximately 2.5 times more than non-members, and Ejikeme describes it as a premier consumer narrative.

Ejikeme also supports the tyre manufacturer Michelin, citing that its tyres outperform competitors by lasting around 25% longer—essential for everyday drivers. “We favor brands that provide market-leading premium products,” he remarked.

The paint and coatings company Sherwin-Williams, known for the Valspar brand, is another preferred investment. Its clientele primarily consists of tradespeople who depend on quality, ensuring consistent product usage.

“Our evaluation also considers how companies engage and motivate their employees since higher engagement usually correlates with lower turnover and costs, ultimately enhancing service,” Ejikeme stated, highlighting Hilton and Marriott as case studies.

Conversely, sectors to be cautious of include banks and utility providers, which frequently receive poor customer satisfaction ratings. Ejikeme mentioned this as a reason for excluding investments in McDonald’s, despite its brand recognition.

It’s crucial to note that circumstances can change. For instance, the fund’s rating for Novo Nordisk, known for its Wegovy weight-loss treatment, recently dropped, disqualifying it from investment consideration. “Although it remains a profitable business with a strong long-term outlook, its customer satisfaction scores have declined,” Ejikeme explained.

While the importance of customer satisfaction is undeniable, it raises questions about resilience during economic downturns. People tend to favor luxury experiences, but in challenging financial times, cost considerations become paramount, which has allowed discount retailers to gain market share.

Nonetheless, Ejikeme remains optimistic that companies providing premium products or services will ultimately come out on top. “As consumer confidence wanes, the market will reveal clear winners and losers, with successful firms that have fostered customer loyalty standing out,” he asserted.

Recent figures from Pets at Home indicate a 1.9% increase in revenue to £789 million in the first half of its financial year, with CEO Lyssa McGowan noting that customer satisfaction remains “excellent.”

However, following a surge in shares during the Covid pandemic, likely due to increased pet ownership, the stock has recently declined due to concerns about growth prospects, rising costs, and a “subdued market.”

This leads to an important question: should I prioritize purchasing dog chews, or is now the opportune moment to invest in a company known for its exemplary customer service?