The Power of Speed, Price and Convenience

With service leaders everything is built around the customer experience. Top management has made it part of their company mission to have policies that take care of the customer. They know customers who are well taken care of come back and buy more. They know that customers that are given the best service/experience create word of mouth advertising.

There are a few firms understand the need for SPEED. Not many but, a few.  It starts with the web site and the call center. Ask yourself…Do you want customers 24/7?   Do you want to be known as the easiest firm to do business with?

In any business things go wrong. It happens to everyone. The question is how fast do employees handle situations to the satisfaction of the customer? The goal should be to have over happy customers. They then fall in love with you for your caring and speedy resolution to their problem.

Costco is a wholesale buying club. I belong to both Costco and Sam’s (owned by Walmart). The difference between the two is dramatic.

About 2 years ago I bought a power washer from Costco. This year I had all sorts of problem getting it started and keeping it running. We could not recall where I purchased it. My wife said to call Costco to see if I purchased it there. I called them Sunday afternoon they looked up name and found the purchase. They said just bring it in and they would refund me the $299 I paid plus tax. I brought it in a couple days later. They just scanned my membership card, found the purchase and gave me the refund. Took about 5 minutes. No questions asked. No arguments. NO “where is your receipt”?

I asked him what they are going to do with it. He said return to the manufacturer and get a full credit. David, the employee, told me all manufacturers have a 5% credit they build into their sales for returns from Costco. Mandatory if they don’t want the millions of dollars in sales Costco generates.

I went inside the store and purchased another one plus $100 in additional food. I kept thinking:

  1. NO other retailer would have done this.
  2. I would be crazy to buy from Home Depot or any other firm when I can buy something from Costco and experience “over-happiness”.
  3. The employee was fast, helpful and never argued.
  4. I felt safe and valued

Costco currently operates 736 warehouses, including 511 in the United States and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain, one in Iceland and one in France.

The last fiscal year ending August 28, 2016 sales were $116, 973 billion with income of $2,350 billion. Average sales per store is $159 million and they have over 218,000 employees.

They focus on price, customer service and quality. They stand behind their products with a “no questions asked” return policy.

Amazon which last year grew 27% or $29 billion for total sales of $136 billion. They are killing Walmart, Sears, Macy’s, and most large retailers. In 2016 Macy’s closed 66 stores and plans to close another 34. Revenue last year fell 4% to $8.5 billion. In Macy’s they have millions of dollars of inventory with VERY FEW employees.

Let’s discuss why I love Amazon

  1. I can order 24/7 Most retailers close by 9 PM and open at 9 or 10 am
  2. I can call them 24/7 and they answer the phone in a few seconds with live people.
  3. All employees know the customer is right. Never argue. Always make empowered decisions on the spot to solve problem in favor of the customer.
  4. The price is always better than anyone else.
  5. I get the product fast.

I probably buy something from Amazon every week and I have never had to argue with anyone at Amazon. Never. They always solve the problem and Always in my favor.

About a week ago my wife wanted me to pick up a cartridge refill from Target for her label maker. After the purchase for about $8 for one roll I wondered what Amazon would charge. OMG. It was $10.65 for 3 on Amazon or $3.55 each vs $7.99 each at Target. I was paying more than double at Target. I kicked myself and then ordered from Amazon. Delivered the next day and they sent me a photo of the package on my front steps.

Saturday I was at one of my investment properties and the tenant asked me where the dehumidifier was that I ordered from Amazon. I called Amazon about 9 am and they told me the order had been canceled. They found the order. Was $6 less and helped me place the order again. Will now be delivered Tuesday August 8. Everything is at their finger tips. They are empowered and driven to take care of a customer.

Too many companies do not trust the customer or employee. Look at the sales and financial performance for Costco and Amazon. They speak for them themselves.

In May 2003 I invested $1000 in 9 service leaders. As of August 6, 2017 my $1,000 investment in Amazon is worth $31,603. My $1,000 investment in Costco is $6,018.

 

John Tschohl

John Tschohl is an international service strategist and speaker. He is founder and president of the Service Quality Institute in Minneapolis, Minnesota. Described by Time and Entrepreneur magazines as a customer service guru, he has written 7 books on customer service including Empowerment, A Way of Life. The Service Quality Institute (http://www.customer-service.com) has developed more than 26 customer service training programs that have been distributed and presented throughout the world. John’s monthly strategic newsletter is available online at no charge. He can also be reached on Facebook, LinkedIn and Twitter.

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