Business Tools

Create Customers for Life: Secrets of a Company Doing $8 Billion Annually

  Providing customer service the Nordstrom way is more than simply asking your customers how you can help them. It is about developing relationships so you can anticipate their needs and keep them coming back.

Customer service is not a strategy; it is a way of life, whether business is up or down. The customer and how you take care of that customer will ultimately determine whether or not your business will succeed, according to Robert Spector, best-selling author and international speaker best known for his book The Nordstrom Way to Customer Service Excellence. His latest book is called The Mom & Pop Store: How the Unsung Heroes of the American Economy Are Surviving and Thriving.

It’s widely known that word-of-mouth is the most powerful form of advertising. To survive as a company, business owners must ask themselves the following three questions: 1) Are you offering a better product or service than your competitors? 2) Are you offering a less-expensive product or service than your competitors? 3) Are you offering customer service that is superior to that of your competitors?

The key is to think like the customer. Many companies are set up for their own benefit and don’t often consider how this philosophy affects the customer, Spector said. Nordstrom is a 108-year-old woman’s clothing store famous for its quality of customer service. This year, Nordstrom is expected to do about $8 billion in sales. The continuity of providing customer service through several generations of the Nordstrom family is what gives the company a tremendous competitive advantage.

The management principles of providing customer service the Nordstrom way include:

Create an inviting place in person, online and over the phone. Provide your customers with choices of products, services and service channels. Most store escalators are 36 inches wide; at Nordstrom they are 42 inches wide. Most stores have one escalator; Nordstrom has two. The area around the escalator is clear of merchandise so it’s easy to get around. The dressing rooms have separate thermostats. Nordstrom stores are located in busy downtown shopping malls where there are plenty of places to eat. Nordstrom has chairs and sofas for a place to rest. Make sure there are clear signage and someone to greet customers when they walk in. Create an easy-to-use website and visit it as if you were a customer. Is it inviting and easily navigable? How does it compare to that of your competitors? When answering the phone, smile and be upbeat.

Sell the relationship. Where businesses succeed is the relationships business owners and their employees develop. Ask questions to get a measure of who your customers are. “Measure both feet” to get an idea of what the customer really needs. The customer has all the answers; all you have to do is ask. The more you know about your them, the better your business and the better your chance of retaining them. It actually strengthens the relationship when a customer sees you are able to rectify a situation. Nurture the relationship with your vendors and suppliers to ensure the ability to continue to offer great products and services to your customers.

Energize your employees. It’s better to hire nice, motivated people and teach them how to sell, rather than hiring salespeople and teaching them to be nice. Hire the smile and train the skill. Nordstrom doesn’t do a lot of employee training. Who trains them? Their parents or whoever raised them and gave them values. If you have those values, it puts you further ahead of the competition.

Empower employees to take ownership.
If there is a bigger cliché than customer service surely it must be empowerment. You empower people by giving them the power or opportunity to make a decision for the company instead of running to a manager. All Nordstrom salespeople are paid on commission so they are empowered to build up their own business as if they were entrepreneurs within an entrepreneurial setting. Use good judgment in all situations.

Nordstrom doesn’t like rules. The minute you come up with a rule, you give the employee a reason to say no to a customer. It all starts with culture built around the idea of customer service. Do you have a culture around your business and, if so, what is it? Nordstrom gives its salespeople the freedom to make decisions. If they make a wrong decision, use it as a lesson for next time. You can’t teach culture; you have to live it, experience it and show it. What are your company’s values and does everyone know what those values are? Hire people who share your core values.

Sustain the people on the front lines through support and mentoring. Instead of assigning employees a mentor, let them naturally find a person to mentor them. Over time, they will eventually become a mentor for someone else. This is how you sustain and build on company culture. Nordstrom uses frequent staff meetings as workshops to compare, examine and discuss sales techniques. Employees act out skits in which they play the roles of salesperson and customer. Top salespeople are encouraged to talk to employees about goal setting, marketing, selling, using the phone and providing customer service. Salespeople are the engines that drive the profit-making machine.

Celebrate company heroes through recognition and praise.
Employees want to feel needed and valued. Recognition reinforces the areas you want to focus on at all times. Elements of a good recognition meeting include demonstrating sincere appreciation for the people being honored, emphasizing team spirit, teaching employees something new so they have something to look forward to and perpetuating the company’s culture.

Advocate teamwork through internal customer service. At Nordstrom, employees are judged by three criteria: sales, customer service and teamwork. They must be team players and help out the people in their department so the company gets credit for that sale. If the team advances, everyone advances. Teamwork creates a sense of ownership and a feeling everyone belongs. The key is communication. Ensure your employees know the mission and everyone is on the same page moving toward a common goal. At Nordstrom, buyers and department managers spend some time shoulder-to-shoulder with salespeople on the floor getting feedback from customers.

Commit 100 percent to customer service.
Constantly reinforce the idea you are in the customer-service business and always be nice.

This seminar was presented during the 2009 SEMA Show's Education Days, and the entire session can be downloaded here. View all of the seminars and topics available