Intricacies
Look closely behind the self-effacing rhetoric and glib explanations. At the
heart of Nordstrom is a finely tuned operating system that is both intricate
and difficult to copy.
Nordstrom keeps its eye squarely on the two stakeholders that drive the
business: the customer and the floor salesperson. Unlike most stores,
where the customer is often secretly regarded as a nuisance, Nordstrom
makes the customer the centrepiece. Shoppers experience Nordstrom as a
better place to shop. Says one national footwear manufacturer familiar
with Nordstrom and its competition: ‘Look at the situation from the cus-
tomer’s point of view. First, Nordstrom carries a wide selection, so you are
exposed to more options there than elsewhere. Second, they carry your size
- and if they don’t, the salesperson tracks it down and delivers it to you
personally, if necessary. Third, they’ll meet anyone’s price – just tell them
or show them an ad ... if anybody sells it for less they’ll match it on the
spot. No hassles. Finally, they have more sales people and they are helpful.
Put it all together and it’s not surprising that Nordstrom wins hands
down.’^16
Harvard Business School professors Len Schlesinger and Jim Hefkett
have investigated these assertions empirically. They cite a recent
Department of Commerce survey that shows a close link between resolv-
ing a customer’s problem on the spot and the customer’s intent to repur-
chase. ‘When customers experience minor problems,’ they write, ‘95% say
they will repurchase if the complaint is resolved speedily. If the resolution
process takes even a little time, however, the number drops to 70%. A
spread of 25 percentage points can easily mean the difference between
spectacular and mediocre operating performance. (Indeed, studies on the
effects of customer loyalty have shown that even a 5% increase in customer
retention can raise profitability by 25% to 85%.)’^17
All of this tends to be especially relevant because demographic shifts in
the United States have produced a population of older customers. In par-
ticular, the 44–50-year-old segment is growing fast and has more dispos-
able income. This population group also expects and appreciates service
and is willing to pay for it.
The following is but a partial list of Nordstrom’s techniques for differ-
entiating itself through service.
●Sales personnel dress like customers and wear no name tags.‘This prevents the
customer from doing half the work,’ says one saleswoman. ‘It is our job to find
the customer and make contact.We are expected to greet everyonewho enters
our department.’^18 Bruce Nordstrom adds: ‘we coach them to avoid a canned
greeting like – “may I help you?” We want to recognize the customer in an indi-
vidual way by saying something like “Isn’t that a great color?” or “What a storm!
Have you seen the great rain gear over there?” ’ Signs posted prominently in
384 Relationship Marketing