Browsing the blogosphere in the wake of Costco’s announcement of increased profits and same-store sales, I’m reminded — if there were ever any doubt — that customer satisfaction and loyalty is so often directly proportionate to customer service values. Pages and pages of comments after news stories and blog entries praised Costco’s customer service, friendliness of staff, quality of products, generous return policy and corporate culture (including CEO Jim Sinegal’s low salary for the sector) ahead of price.
As a recently signed-up Costco member, I eat lunch from the free samples and hurl myself at multipacks of socks and mangoes alike. The staff are definitely part of the experience, and even have the good grace not to smirk at the invariably awful mugshots on membership cards.
Of course, these results point to the economic environment, in which consumers are reigning back on discretionary spending and focusing on the essentials. Witness Target’s reduced Q4 profit — some reports suggested that customers overlooked Target’s competitive pricing on staples, instead associating the retailer with its designer lines.
But it’s more than the economy. There are many lessons retailers can learn from Costco. The return policy, the cheap
cafeteria and the right combination of cheap, good-quality
staples combined with the surprise-and-delight items for the treasure hunters are smart, for sure. But the biggest lesson comes down to just one defining principle: treating staff right. These are the frontline ambassadors, whether it’s a stripped-down warehouse or a carpeted department store. Yes, good staff members are lucky to have jobs at all in a waning economy; but the stores are even luckier to have good staff members.