Does anyone out there remember when stores used to stock their shelves and racks at night when there were few, if any, customers? Those days, customers could push their carts up and down the aisles all day long, unimpeded by the many stocking dollies piled high with goods waiting to be put on shelves.
Not today! Now we customers seem to be in the way of employees trying to stock shelves…and it’s obvious they would rather we were not around while they were working. Of course these are only the employees—management must want customers or they wouldn’t have a job long. I just wonder why they work so hard to make it difficult to shop at their place of business. Is that what they call customer service?
It doesn’t seem to matter whether the store is large or small; making it difficult to shop must be the new norm of customer service. Night shift work must no longer be acceptable I guess. Driving by these places at night, it is obvious that no one is busy stocking shelves for tomorrow’s customers.
Oh well, we’re only the customer.
I wonder what Stew Leonard would say about this issue?
I just read a comparison between the market values of the two largest U.S. automakers and Japan’s two largest automakers. The market value of GM and Ford combined is $8.1 billion. The market value of Toyota and Honda combined is $146.3 billion—over 18 times greater than the U.S. big two.
Why is the American auto industry on life support, while Japan’s is alive, healthy, and prosperous? Most of Japan’s cars, that are sold in the U.S., are built in the United States. Japan’s auto makers belong to the same U.S. unions, pay the same wages, charge comparable prices for their products…and yet, they are many times more successful. Why do you suppose that is?
To find the answer I think we only have to look as far as the customer satisfaction surveys conducted by J. D. Powers, Consumer Reports, and the like. American automobiles just do not satisfy the consumers as well as the Japanese automobiles do, and they haven’t for a long time. According to the surveys, Japanese autos are better designed, higher quality, and just built better. In other words, Japanese automakers provide more value for the money.
How does this apply to small business?
Value for their money is also what our own customers and clients search for. It doesn’t matter if you are a one-person web site design studio, or General Motors…if you do not provide the best value for your customers or clients money—you will fail. It is as simple as that. Maybe it is time for all of us to take stock of what we are delivering to our customers and clients.
Toyota does it; Honda does it; Costco does it; Avon does it—why can’t we?
In their November 2008 issue, Fast Company magazine featured an interview with Jim Sinegal, CEO and cofounder of Costco. While most retailers are whining about the economy, in August Costco had an increase in same-store sales of 9%. The reason for this is very simple; there are no secret programs, or special incentives to buy there…just good old-fashioned business sense. Here are the key points in Jim’s interview that we can all learn from.
- Don’t gouge your customers. The interviewer pointed out that some suppliers still balk at Jim’s policy of not marking products up more than 15%. So much for supply and demand marketing.
- Treat your customers well. Jim: “Customers shop with us for value. They don’t shop with us for cheap prices on cheap merchandise. They expect us to deliver value on quality….The final analysis is, the customers vote at the checkout.” This is something for all of us to remember.
- Treat your employees well. Wall Street complains that Costco treats its customers and employees better than they do their shareholders. They pay their workers an average of $17 per hour, and 90% of health insurance costs, for both full-time and part-time employees. Yet, revenues have grown 70% in the last five years, and their stock has doubled.
- Know your competition. Jim: “Hardly a week goes by that I’m not in a Sam’s.” Do we study our own competition that closely?
- Try new things. Sales on Costco’s e-commerce site are expected to hit $1.6 billion this year, a 33% increase over 2007. Coffins are one of their big e-commerce sellers. Who would have thought?
- Do not be afraid to fail. Jim: “You don’t have enough space in your magazine to talk about all the things that we’ve tried that didn’t work out.” How bold are we about trying new things?
- Manage by walking around. Jim: “You know, there certainly are days when I’ll visit 12 (stores). I will be traveling to our warehouses every single week between now and Christmas…I try to approach the visits from the standpoint of the customer. Does the building have the right goods out? Is it well stocked and clean and safe? Nothing is a bigger turnoff than poor housekeeping.” Spending quality time with our customers and employees is going to be one of the keys to surviving this recession.
- Be innovative. Jim: “We just reconfigured our cashews. They were in a round canister, and we put them in a square canister. It sounds crazy, but we saved something like 560 truckloads a year of that one product.” In today’s chaotic world, innovation is not optional.
- Keep overhead low. Jim answers his own phone and sends his own faxes. I read somewhere else, a while back, that Jim uses the same desk, in the same small office where he started 25 years ago. Many of us can take a lesson from that.
Obviously, Costco is a reflection of its CEO and the values he brings to his business. But then, aren’t all our businesses a reflection of the values of the owner?
Something to think about.