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Three Attributes Of Enormously Successful Companies

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Customer service is an important concept being touted by all types of companies. In many company mission statements, you will probably find a statement or inference that the organization seeks to make consumers’ lifestyle better through the use of its products and/or services. The basic problem of customer service is that many companies either don’t know how to offer customer service, forget to monitor the customer services its employees provide or identify the attributes that comprise customer service. Customer service is a complex, often vague  attribute. Think about the number of retailers that “promote customer service” yet you can’t get waited on, are unable to find a cash wrap or the merchandise is out of stock. I recently went to a fast food restaurant during lunch hour; the service was not fast even though the restaurant business was slow. Perhaps the manager was in training. Perhaps the employees didn't care. Regardless of the reason, the customer service was inferior.

Excellent customer service shouldn’t be difficult to define or deliver. Unfortunately customer service varies depending on the employee, time of day, and training received. Customer service varies, but companies can still be successful. The difference between a company that “breaks even” and is “enormously successful” is based on three important attributes: trust, consistency and loyalty.

Trust: Customers’ and employees’ trust of a business are critical in its ultimate success. When a business builds trust, customers will beat a path to their cash register. Think of the following examples of trust-building exercises by different organizations.

  • Zappos: the company promises free return delivery up to 365 days after the purchase, no questions asked. The process is easy and easy. Best of all, the company continues to honor the promise without any hidden charges. Zappos builds trust between its customers and the company.

Consistency: Surprises should be left for birthdays, anniversaries, and wrapped presents. A surprise shouldn’t come in the form of a price change, fit problems or confusion with style. Consumers need consistency in the company’s presentation of its brand, pricing, product assortment and image.

  • Ralph Lauren: Season after season, Ralph Lauren styles and advertising promote the Americana image. When the designs for the 2012 US Olympic team were revealed, the design was classic Ralph Lauren. I asked a group of consumers what they thought of the Ralph Lauren design. Comments included “classic,” “I want it,” and “divine.” I then asked the consumers why they purchased Ralph Lauren designs. Overwhelming the consumers stated “the items always fit.” Ralph Lauren offers consumers consistency.
  • Nordstrom: Gold standard! Nordstrom is the gold standard of customer service. Part of the company’s service is old fashion courtesy. In an era of e-mail, the company spends a lot of money on stationary. Sales associates send hand written thank you notes to customers. These notes are reminders that customers are the foundation of the company. The important aspect of the thank you notes? They aren’t written once in a while. They are written on a consistent basis.

Loyalty: There is a saying in retailing; “When a customer purchases the first product, overhead expenses are paid. When a customer purchased two items, a profit is made." The long-term success of a retailer relies on customers purchasing the “plus-one” and loyal behavior. The loyal customer is the lifeblood of the retailer. Customers will be loyal to a company as long as the company is loyal to its customers. Loyalty is definitely a two way street.

  • Wal-Mart: The Company was founded on the everyday low pricing strategy. Consumers knew that the merchandise price on Monday was the same fair price on Wednesday. They wouldn’t get buyer’s remorse by missing a sale; Wal-Mart didn’t have sales. Then the company changed the pricing policy and merchandise strategy. While the aisles became wider, favored product lines were dropped and prices changes. Loyal consumers were outraged and shopped at the competition. Wal-Mart soon realized the error and reinstated the everyday low pricing strategy. Many consumers forgave the company and came back to the retail giant. .
  • Kohl’s: Kohl’s built a fashion empire based on loyalty to its consumers. Since its inception in 1986, the company made a commitment to its customers to offer quality and fashion at a discount. It has never made a misstep in pricing, promotion or merchandise. Kohl’s continues to expand its merchandise brand offerings without sacrificing price or quality. Examples of brands include: Samsonite, Food Network, Kitchen Aid, Shark, Simply Vera Vera Wang and Jennifer Lopez. Vera Wang, Dana Buchman. Year after year, the loyalty shown to the consumer has been repaid. Kohl’s continues to grow in size and profits due to consumers’ loyalty to the retailer. Consumers across a wide range income brackets flock to the retail giant, knowing that they will find products for their family.

Zappos and Nordstrom consistently rank as members of the National Retail Federation (NRF) “Best Customer Service” Award Winners at the Annual January Conference – four years running – based on the views of over 8,500+ respondents each November.  The April BIGinsight Monthly Consumer Study responses of Kohl’s shoppers demonstrate their customer loyalty in the following ways:

  • Average number of years Kohl’s shoppers have shopped for Women’s Clothing there most often – 10.3 years, indexing at 105 compared to their retail competitors
  • Kohl’s enjoys a Net Promoter Score (rating of how likely consumers are to recommend a retailer to friends and family) among Adults shopping for Women's clothing of +36.2%, over triple what competitors' average ranking of +12.4%.
  • When asked “Why do you prefer this particular retailer for women’s clothing?”, Kohl’s index tops competitors in every single category.  Price, Selection, Location, and Quality are the most often mentioned reasons, indexing at 121 to 141 compared to competition, but they also index between 124 t0 156 for In-Store Experience, Store Loyalty Cards, Trustworthy Retailer, and Knowledgeable Sales Staff.

For all the retailers stating that they offer excellent customer service, ask yourself three questions:

  1. Is your company trustworthy?
  2. Is your company consistent?
  3. Is your company loyal to the consumers?

The answers are yes or no and absolute. Any hesitation or shades of grey result in inferior customer service. It also results in lower profits. Self-awareness can be good for the soul; it is excellent for the company’s bottom line.

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The changes over the past decade in consumers’ purchasing patterns are examined in Marianne Bickle and The Prosper Foundation’s recent book The Changing American Consumer. Implications for businesses are examined. Readers of Marianne’s Forbes blog are given a 50% discount on the book, which normally sells for $18.95. For more information or to purchase the book, visit www.ChangingConsumer.com/info. Enter the following code at checkout to redeem the special Forbes reader discount: 7XCBFH32