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THE CUSTOMER IS ALWAYS
H. Baker -
Tom Peters, co-author of In Search of Excellence, cites Stew Leonard's discount grocery store in Norwalk, Connecticut as an example of excellence in action. Billed as the worlds largest dairy, this highly profitable store does more volume than any single store of it's kind in America. This one store services about 100,000 customers per week, brings in about $90,000,000 in revenue per year and employs 600 people.
Speaking at a recent business meeting, Stew Leonard Jr., the 33-year-old president, talked about his personal commitment to customer satisfaction. He mentioned a huge 5000 pound boulder that sits just inside the store's main entrance. Carved in large block letters on the stone surface are these words:
RULE 1: THE CUSTOMER IS ALWAYS RIGHT!
RULE 2: IF THE CUSTOMER 13 EVER WRONG
REFER TO RULE 1.
Unlike many businesses that might post a small "the customer is always right" sign on a wall, at Stew Leonard's you are greeted at the entrance with the store's commitment carved in stone. At Stew Leonards it is more than lip service, they really mean it!
This unique store has all customers walking in the same direction through a labyrinth ofproduce aisles towards the many check out stations. A very large sign asks for customer comments. Each day all of the previous days comments are typed up and copies presented to each employee by lunch time. Serious note is taken of each comment.
Not long ago some comments referred to the customers dissatisfaction with the boxed strawberries. The stated concern referred to the problem of crushed or spoiled strawberries which might be hidden at the bottom of the box. Similar comments were made about pistachio nuts, eggs, etc. As a result, the store set up counters with loose strawberries, pistachios and eggs which the customer could pick and box themselves.
At first some employees were concerned about the ease with which customers could pick up pistachios and eat up the profits as they shopped. What happened was the pistachio sales rose to over 1 ton per week. That is an amazing 1% of the U.S.A. supply.
Still, when a customer was seen standing in front of the loose strawberries eating one after another out of his hand, Stew Leonard was called. When he approached the customer and offered to weigh and bag the strawberries the customer asked, "Do you really mean what you say on the rock at the entrance that stated THE CUSTOMER IS ALWAYS RIGHT?" The answer was "yes" and the employees were told to let the customers eat the strawberries.
The next day Stew Leonard said to the employees that the typical customer shops twice a week and spends $50 each time. If the customer shops in the store regularly for 10 years, they will have spent $50,000. He told them to think of each customer as a $50,000 customer. If they want to eat some strawberries, let them.
THE CUSTOMER IS ALWAYS RIGHT.
This attitude of listening to the customer and learning from their comments applies to all service operations. Finding a way in which the customer is right (and understanding its perceived importance) is not only important to the service group but applicable to all organizations.
The significance of really listening to customer comments and complaints was examined in a recent U.S. study reported in PR Reporter. The consumer affairs study revealed an unexpected high level of dissatisfied customer complacency. The study found:
· Only 4 out of 100 dissatisfied customers will complain.
· For every complainer there are 24 with the same complaint who never say anything.
· 13 per cent of dissatisfied customers will tell 20 people about it.
· 90 per cent of unsatisfied customers do not repurchase from the offending company compared to 70 per cent who will remainloyal when complaints are satisfactorily handled.
It has often been noted that it typically costs 5 times more to get a new customer than to keep present ones satisfied. It could easily be argued that the best advertising is a satisfied customer. Maybe only 1 out of 10 readers will believe what is stated in most national advertising. We all tend to believe word of mouth advertising.
With all of this in mind, the following are some of the key priorities that will aid in achieving and maintaining the highest levels of loyal customers.
· Pursue methods of independently uncovering complacent customers who may have hidden complaints.
· Set up a high level channel for obtaining service personnel perceptions of customer dissatisfactions. This frequently valuable input is often passed over.
· Stay alert to the satisfaction level of customer
interface personnel. A Gallup poll (PR Reporter
noted that many marketing executives feel that
customer satisfaction can only be obtained when
employees are satisfied. Dissatisfied workers
simply can't satisfy customers for long.
· Provide on-going customer relations skills and awareness training for all customer interface levels. Some organizations lose sight of the serious customer perception of indifference that can occur at the entry clerical level interface. (See "Handling Customers With Care" Field Service Manager Magazine.)
· As an overall approach, look to your customers first to be the guide for
producing better products, services and ways to
do business. It has been said that "customers
are smarter than companies."
In the quest for quality and excellence, the customer's perception is the most important key. The customer knows the supplier through their products and services, policies and personnel. If you'll ask, the customer will tell you how to make it better.
Cole Baker is President of The Compo Group, a consulting company located at P.O. Box 449, Westport, Connecticut 06881. The Compo Group specializes in customer relations training programs for service groups in technology companies throughout the world.
Over the last 25 years Mr. Baker has held positions ranging from Field Service Engineer up through President and Chairman of the board of five high-tech organizations. These included AMF, Barnes Engineering, Pyrotel and Laser Sciences.
In 1971 he founded and was President of Intec Corporation, the world leader in laser scanning inspection of continuous material. In 1982 he left Intec to form he Compo Group, a training company built around a "breakthrough concept" in achieving customer satisfaction.
Throughout his career, Mr. Baker has pursued a study of the "Hidden Agenda Factor" in communication between people. He taught psychology and philosophy at the university level, presented papers on communication, and has been a guest on network radio talk shows.