It’s 1974, and a man walks into a store in Anchorage, Alaska. He has the intention of returning a set of car tires he purchased at that location. One important detail is that the tire store no longer exists. The tire store was sold and Nordstrom’s fashion retailer moved in. Nordstrom does not sell tires, they specify in shoes and high end fashion garments, but Nordstrom has a ‘no questions asked, return policy.’ The customer was supposedly sincere on being able to return the tires and receive a refund, so the empowered salesman granted the request, took the tires, and paid the customer the amount of the refund.
This story has become legendary for the Nordstrom brand. Ownership and management over the years have confirmed the story. The reputation of the brand having industry leading customer service and engagement has only been strengthened by a generous gesture by a store salesperson some 40 years ago.
Nordstrom has only a few guiding principles in order to make this story possible. Upon being hired, there is only one rule in the employee handbook: ‘Use good judgment in all situations.’ This simplicity is at the foundation for Nordstrom being widely recognized as a leader in great customer experience. Let us dive deeper to find solutions to strengthen your company’s customer experience…
1. Define your Company Purpose
And once company purpose has been defined, as a leader, you will be able to inspire and align your employees to deliver that purpose for your customers. Nordstrom has defined their purpose as, ‘deliver the best possible shopping experience, helping customers possess style not just buy fashion.’ As a new employee is introduced at Nordstrom, I can certainly imagine that this purpose, along with one rule in the employee handbook, can be simply aligned. If everything I do as a Nordstrom employee is to deliver the best possible shopping experience, and help customers possess style, then it is no wonder Gallup Poll recognized Nordstrom as a customer experience leader.
2. Create and encourage Raving Fans!
What is a raving fan? They are loyal consumers, and have a genuine connection with a team, a fashion company, or a little known rock band. Those passionate, raving fans of the Leicester City Foxes and the Chicago Cubs were rewarded handsomely in 2016 after decades of toiling in mediocrity. And don’t think we haven’t heard those fans shouting from the rooftops.
- Raving Fans share your company’s passion, through word of mouth or through social media channels.
- Raving Fans strengthen your customer experience. They share their personal positive stories about your brand. They are a magnifying tool. Those experiences you are already creating can be explored deeper, utilized, and promoted.
- If you have a strong company purpose, alignment of your employees with that purpose, and engage with your customers, you are on the right track to finding those Raving Fans. But there is also a tool to gauge your customer loyalty.
- A scoring system was created by Bain and Company in 2003 in order to identify Raving Fans, and in turn, measure companies against others in their industry. That scoring system is called the Net Promoter Score or NPS.
Promoters’, or your Raving Fans. They identify with your company, are loyal, and most likely will snap a photo to share on Instagram, leave a review in Yelp or Tripadvisor, or promote your company in everyday conversation.
Customers who score a 7 or 8 are your ‘Passives’. At first glance this may seem like a very high score. You may be patting yourself on the back already. But the reality is that they count for nothing. Why you ask? Because they are simply satisfied, and may choose to shop, buy, eat, or stay with the competition next time. Passives will not be actively sharing their experiences online, or in conversation.
And finally, customers that rate a 0 – 6 are your ‘Detractors’. They have had a bad experience somewhere along their customer journey, and they are likely to share their experiences. Think of how often you have reconsidered buying a product or staying at a hotel, because of multiple bad reviews online? The Detractors have influence. But those of us that have been in customer service realize that we have an opportunity to turn a Detractor into a Promoter depending on how we as a company or individual deal with those customer experiences. Just draw from the Nordstrom story and imagine how that one instance could turn that (potential) customer into a Detractor or Promoter of Nordstrom. As an example, if you question 100 of your customers and the results are: 30 customers rates a 9 and 10, 60 customers rates a 7 or 8, and 10 customers rates a 0 to 6, then your NPS score will be calculated as 30 – 10 = 20.
For those that are interested in an ROI, consider that, Promoters account for 80 percent of referrals in most businesses (Net Promoter System, 2013). Detractors account for 80 percent of negative word-of-mouth (Net Promoter System, 2013). Promoters generally defect at lower rates than other customers, which means that they have longer, more profitable relationships with a company (Net Promoter System, 2013). On average, an industry’s NPS leader outgrew its competitors by a factor greater than two times (Net Promoter System, 2013).In order to strengthen your customer experience, along with addressing individual customer needs and expectations through the NPS, you must…
3. Support new customer expectations
Not exclusively, but ‘What do Millennials expect?’. I am sure you can imagine the experience needs to be faster, simpler, connected to social media, mobile, more fun, more experiential. New customer expectations involve elements of self-service. In this day and age of multitasking customers appreciate speed and efficiency. If your customer journey does not allow for any self-service then it should be re-evaluated.
New expectations have stripped away much of the luxurious, white gloved service we may have grown accustomed to in the past. Many Millennials are looking for genuine interactions with service orientated employees and companies. Scripted greetings and responses from staff, or total conformity of appearance by employees are less likely preferred as a customer experience.
Your company’s values, or purpose, is important to the new consumer. And if your company contributes to global sustainability then it certainly can have influence. The new consumers connection to the ‘greater good’ is a real. The old adage of never over-promise and under-deliver is important to consider, as a Gallup Poll finds consumers believe companies deliver on their brand promise only half the time.
Customers are more reliant on technology and more likely to research, review, and be influenced online before purchasing. And online marketing has evolved to support those customer expectations. The Harvard Business Review details what is know as ‘Decision Simplicity’ and ‘Simplified Marketing’. The Decision Simplicity Index is ‘a gauge of how easy it is for consumers to gather and understand (or navigate) information about a brand, how much they can trust the information they find, and how readily they can weigh their options.’ In effect, your Promoters, or Raving Fans play an influential part in the ‘Decision Simplicity’ Index. As explained by HBR, ‘in the context of decision simplicity, “trust” isn’t about trusting the brand; it’s about trusting the information gathered.’ Analyze how you can use these new online marketing algorithms to identify where the consumers are in their purchase journey, and then direct them to the most appropriate webpage has a huge impact on whether your Customer Experience is simple, fast, reliable, socially connected, or even fun.