Saturday, 29 March 2014

Nordstrom & Customer Service


Known for extraordinary customer service, Nordstrom's reputation is as one of the great US twentieth century retailing companies. The company organisation chart illustrates why they take the service approach they do: they are there to serve the customer, in the best way.  Called the 'Inverted Pyramid', it represents the company’s philosophy and structure, placing customers at the top. Next are those who directly serve customers. The Board of Directors is way down at the bottom.
A story - possibly apocryphal - that illustrates Nordstrom's customer service is that a professional musician in a elite New York orchestra left his tuxedo on the train on his way to a performance and rang Nordstrom in a panic on his arrival at Grand Central. Nordstrom retrieved his measurements from their files, found a suit in their store, adjusted a suit to fit, pressed it and had it delivered to the customer at the performance venue in time for the concert.
However, in the 1990s, the company began a long slide and took a dramatic downturn in 2000, with same-store sales actually declining. Then from 2000 to 2006, Nordstrom strongly recovered when fourth-generation family member Blake Nordstrom assumed leadership and refocused on the primary flywheel that had made the company great in the first place the customer-service, professional-sales flywheel-while substantially improving background systems, such as inventory controls (Centre for Good Governance, 2006; Wikipedia, 2014).
Blake Nordstrom answers his own phone, as had been Nordstrom family custom. He re-established the inverted-pyramid structure that placed executives at the bottom, and customers and front-line salespeople at the top. He accepted responsibility for the company's problems, in his own words: "It was evident to my cousins and me that [our fall] was our fault-not the culture's fault, but us personally" (Centre for Good Governance, 2006; Wikipedia, 2014; Zoltners et al, 2012).
The average wage for retail salespeople is $12 an hour; at Nordstrom its $19.18. With commissions, some make more than $200000 a year (sources: Bloomberg, Wikipedia & Forbes; GreatPlacesToWork, 2014).
Nordstrom's transition began with significant changes in the leadership team-including the CEO, CIO, CFO, and president of full-line stores. The Nordstrom team re-embraced the idea of hiring based on values and character, not skills; "We can hire nice people and teach them to sell, but we can't hire salespeople and teach them to be nice" (Zoltners et al, 2012; Centre for Good Governance, 2006; Wikipedia, 2014).
Todd Andrlik has a great story to tell about Nordstrom's approach to customer service. A "Portland man [...] needed an Armani tuxedo for his daughter’s wedding. As a last-ditch effort to find an Armani tuxedo, he went to the local Nordstrom. His personal shopper took his measurements and asked for a little time to work on it. The customer left and the next day he received a phone call from Nordstrom saying they had found the tux and it would be ready the next day. The next day he drove to Nordstrom, tried on the tux and found it fit perfectly. Nordstrom had altered the tux for free. He asked his Nordstrom personal shopper how she did it. She just smiled and shrugged “magic.” He pressed and the Nordstrom personal shopper explained that after he left the store she had immediately worked to solve the problem by utilizing her connections and finding the tux on the other side of the continent in New York. The New York distributor put the Armani tux on a truck bound for Chicago that day where the personal shopper had coordinated for a Chicago Nordstrom employee to meet the truck at a rest stop and retrieve the tux. Once in the Chicago Nordstrom store, the tux was over-nighted to Portland and altered to fit perfectly. The unbelievable service? Nordstrom doesn’t even sell Armani tuxedos" (Andrlik, 2007).
Nordstrom has one over-riding company rule: "Rule #1: Use best judgment in all situations. There will be no additional rules" (Wikipedia, 2014).

Nordstrom Details (sources: Bloomberg & Forbes; Wikipedia, 2014; GreatPlacesToWork, 2014)
  • 2012 Fortune 500 rank: 242
  • 2012 Best Companies rank: 61
  • Number of US employees: 52431
  • Most common job title and or function: Sales Department Manager
  • Avg. annual compensation for that job: $49500

Sam

References:
  • Andrlik, Todd (18 Feb 2007). Legends of Unbelievable Nordstrom Service. Retrieved 29 March 2014 from http://toddand.com/2007/02/18/legends-of-unbelievable-nordstrom-service/
  • Centre for Good Governance (2006). Handbook on Service  Excellence: A Guide to Service Excellence in Public Management with Lessons from Best Managed Companies. Retrieved from http://unpan1.un.org/intradoc/groups/public/documents/CGG/UNPAN026214.pdf 
  • Conte, Christian (7 September 2012). Nordstrom customer service tales not just legend. Retrieved 29 March 2014 from http://www.bizjournals.com/jacksonville/blog/retail_radar/2012/09/nordstrom-tales-of-legendary-customer.html?page=all
  • GreatPlacesToWork (2014). FORTUNE’s 100 Best Companies to Work For®: Nordstrom. Retrieved 29 March 2014 from http://www.greatplacetowork.net/best-companies/north-america/united-states/fortunes-100-best-companies-to-work-forr/644-2012
  • GreatPlacesToWork (2014). Nordstrom Inc. Retrieved 29 March 2014 from http://us.greatrated.com/nordstrom-inc
  • Mulady, Kathy (25 June 2001). Nordstrom Way is legendary in shopping. Retrieved 29 March 2014 from http://www.seattlepi.com/business/article/Nordstrom-Way-is-legendary-in-shopping-1058140.php
  • Nordstrom (6 November 2013). Nordstrom Stores - What's not to love? Retrieved 29 March 2014 from https://www.youtube.com/watch?v=8wWRRppqlF8  
  • Wikipedia (2014). Nordstrom. Retrieved 29 March 2014 from http://en.wikipedia.org/wiki/Nordstrom
  • Zoltners, Andris A.; Sinha, PK & Lorimer, Sally E. (29 August 2012). In Sales, Hire for Personality, then Train for Skill. Retrieved 29 March 2014 from http://blogs.hbr.org/2012/08/build-your-sales-force-dont-buy-it/

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