“Improve customer service.”
With these three simple words, Jamie Nordstrom (President of Nordstrom) described the “secret” strategy that has powered the company’s spectacular success…
This may seem more like common sense than a grand vision for the company, but when you consider how this retail superstar performs on a regular basis, it’s worth taking a closer look.
Compared to the industry average, Nordstrom earns double the sales per square foot of retail space, and over the past five years, the company’s share price has risen 120%.
As Nordstrom’s CEO points out:
“Customers will buy more when they’re happy.”
Most retailers talk about the importance of customer service, but few are meeting the standards set by Nordstrom…
So, what does Nordstrom do differently? One giant clue comes from the freedom that they give their employees.
Nordstrom employees are free to make decisions for themselves. Rather than having to ask a manager, they can approve customer requests with their own best judgment.
Businesses are often reluctant to shift decision making to frontline staff – mainly because of concerns that mistakes will be made, or that uninformed employees will allow the company to be taken advantage of…
But Nordstrom seems confident that happier customers outweigh any potential downsides.
Nordstrom’s “million dollar club” is another indicator of the latitude that the retailer allows its employees. The “club” is made up of employees who have been able to bring in at least $1 million in sales. The success of these superstar employees comes largely from their ability to build their own client lists…
Employees can use these lists to cultivate relationships with their clients in any way they deem appropriate.
Customer Service For The 21st Century
Like many retailers, staying at the forefront of technology has been an important part of Nordstrom’s growth strategy. The company now ships to over 40 countries, and says that ecommerce sales have increased 40% in the last year.
However, delivering the same kind of customer experience encountered in-store has been a challenge.
Consequently, Nordstrom’s has come up with a couple of clever, 21st century fixes to provide the same level of personalization online. The solutions include allowing customers to instantly purchase items that have been featured on Instagram.
Nordstrom is also investing heavily in big data…
Nordstrom has established an “innovation lab,” where they collect and analyze the shopping patterns of their customers to help refine their marketing and promotional techniques.
They are able to leverage data from social media feeds to make in-store decisions. For example, products that are popular on the company’s Pinterest account are given greater prominence on the sales floor.
Guaranteed Satisfaction – For Life!
One of the primary ways Nordstrom has distinguished itself from the competition is their lifetime guarantee policy. This legendary return policy is best exemplified by the (perhaps mythic) tire story:
A man walks into the Anchorage, Alaska Nordstrom store and wants to return a set of tires, despite the fact that Nordstrom doesn’t sell tires… The store that previously occupied the same space did, though, and the Nordstrom manager still decided to refund the customer their money – for a product they didn’t even sell.
Lifetime guarantees aren’t the only way that Nordstrom makes the decision to buy even easier…
They also offer free delivery and free returns. The company says that it’s working hard to make sure that customers receive their parcels as soon as possible, with the eventual goal of offering same day shipping.
When you go into Nordstrom, you know that you will receive the help you need to make a shopping decision that you’ll be happy with. They achieve this with their super popular “personal stylists.” In response to the demand, they’ve significantly increased the number of these stylists over the past few years.
Nordstrom’s advice on how to keep customers is actually quite simple. New employees are given a card with the following instructions:
Going The Extra Mile
One story that truly exemplifies how far Nordstrom is willing to go for happy customers is sometimes referred to as the “diamond story.”
In North Carolina, a woman lost her wedding ring while trying on clothes at a Nordstrom store. When a security guard saw her searching for her ring, he asked her what the problem was. After her explanation, he joined in the search. When this proved fruitless, the guard asked the janitorial staff to help out with the search… Upon opening up one of the vacuum cleaners, the wedding ring was found at last!
It’s this kind of story that can produce massive good will and long-term customer loyalty!
Nordstrom’s pillars of success can seem relatively simple: premium pricing, fantastic customer service, and an exceptional shopping experience…
But again, as the Nordstrom CEO points out, “Customers will buy more when they’re happy.”
In your corner,