Nordstrom’ award given annually to one member of management below the
vice president level who exemplifies the values and work ethic of the founder.
●Smaller awards are given out daily. For example, sales personnel are encouraged
to be thoroughly acquainted with their competitors in surrounding stores. If
they identify a competitor’s price that is below Nordstrom for like merchan-
dise, they are given $5.00. Nordstrom’s prices are immediately lowered. At
many stores, the store manager is on the loudspeaker before doors open,
reviewing how store sales did the previous day and acknowledging the one or
two departments that contributed most dramatically to the previous day’s
results.
●Peer pressure is particularly keen at the management level. At the climax of the
yearly budget cycle, annual sales targets are set in an intense and spirited public
forum. All buyers, department managers and store managers within a region
attend the annual event. One by one, each department head stands up and
announces sales goals for the following year. Amid suspense and the theatrical
fanfare one might associate with a TV game show, the number is written upon
a large card on stage. Immediately thereupon the individual’s boss unveils the
previously hidden goal for that manager. If the luckless participant has projected
sales below the boss’s target, boos and catcalls follow. If projections exceed,
cheering and whistles greet the news. One observer states: ‘It’s a very intense
but generally upbeat experience. Like a high stakes auction, peers are continu-
ously revising their sales targets in the minutes before their name is called,
gearing their projections off imputed growth rates in the numbers that have
been revealed. As with all regional meetings, one of the co-chairmen or co-
presidents is present – often wearing a sweater emblazoned with the letter
“N”.’^30
The dark side?
In the face of so many factors driving performance, one might anticipate
negative side effects. These might include grandstanding before customers
in inappropriate ways to garner service awards or hanging out near the
register to spot (and cash in on) the customer who has already preselected
an item. (At Nordstrom this inappropriate behaviour is labelled ‘shark-
ing’.) Nordstrom’s pervasive but informal management system provides a
powerful deterrent to such abuse. If peers or a department head spots inap-
propriate sharking behaviour, the violator is soon to know. In addition,
Nordstrom fields an auditing team known as ‘phantom shoppers’, who
randomly appear in departments and act as customers. Later they meet
with the department head and sales personnel to report on (1) whether
they were approached within 60 seconds of entering the department, (2)
friendliness, and (3) whether the salesperson seemed well informed.
Bob Nunn, an Executive Vice President of Nordstrom, states:
396 Relationship Marketing