Companies That Exceed Expectations
Exceeding Expectations — Nordstrom
by Gene Bisbee
2 October 2007
The world "refund" has sent many merchants into fits of apoplexy. How can you make a profit if you give back money to your customers? Although most retailers now have refund policies, there's one that doesn't. Nordstrom.
The upscale specialty retailer consistently ranks No. 1 in customer service makes refunds a non-issue. If Nordstrom's carries it, you can return it for a refund. No receipt. No proof of purchase. No questions asked.
In fact there is only one rule in the 75-word so-called handbook for the Seattle-based company's 57,400 employees: "Use your good judgment in all situations. There will be no additional rules."
In spite of growing to some 100 full-line stores and 50 outlet stores (Nordstrom Rack) nationwide, the company's goal for outstanding customer service remains. Infusing the sales staff (called associates) with a total commitment to the customer manifests itself in many ways.
Salespersons keep track of some customers' tastes, sizes, birthdays, phone numbers, likes and dislikes in a computerized "Personal Book." They call or write customers when a particular size or style comes in and send thank you cards after a purchase. They take charge of their customers' problems. That can mean delivering a suit and tailor to an office for a fitting, charging for just one shoe to a customer with only one leg, showing up with an alteration on a customer's doorstep, or on rare occasions even running across the street to buy an out-of-stock item from a competitor while the customer waits.
This service creates loyalty among its customers and word-of-mouth marketing that lures new shoppers to its stores.
It's fitting that the top customer-service retailer got its start in 1901 as a shoe store; Swedish immigrant John Nordstrom learned how to never to let a customer walk out the door before he made a sale. He did this by satisfying the customer, stocking even rarely sold shoe sizes and styles.
Nordstrom became the nation's top independent shoe chain in the early 60s and then diversified into apparel. The chain went public in 1971 and continued growing. After a few rough years around the millennium, the chain is back to scoring healthy same-store and overall sales growth, posting $8.6 billion in sales in 2007.
Except for one interruption, members of the Nordstrom family have filled top roles in the company from the beginning. They've stressed the hiring of naturally "nice," motivated people who aren't afraid to take risks to serve their clientele. The corporate organization structure is described as an inverted pyramid with the sales staff at the top, supported from below by managers, company executives, and at the bottom, the company president.
Salespersons are given free rein to act as entrepreneurs in helping the customer and suggesting merchandise additions to managers and buyers. They're motivated by a generous commission-based pay structure in most departments whose success is measured by higher than average sales-per-square-foot.
In addition, the company's diversified workforce (people of color 41% of employees, 31% of managers) also receive employee discounts, profit-sharing and other rewards and perks, explaining why Nordstrom regularly lands on lists for best places to work.
Other retailers that receive high marks for customer service: