Manjari Raman: Lessons from low-slung jeans

OUT OF THE BOX/ The customer feedback loop should end where it begins: with the customer

Last week, Peter Nordstrom, the executive vice-president of the $6.5 billion retail chain Nordstrom Inc, made a very public apology to a dissatisfied customer: 11-year-old Ella Gunderson. She had walked into Nordstrom's Seattle store looking for new summer clothes, but found the tops too skimpy and the jeans too low-slung.

When she complained about the lack of choice, a sales clerk told her: "That's the look." Ella walked out empty-handed and later in the day, wrote a stiff letter to Nordstrom, saying, "With a pair of clothes from your store, I would walk around showing half of my body, it seems." Ella's mom agreed to post the letter, of course.

Back at Nordstrom, Ella's letter raised a storm. Two managers, including the Seattle store's head, promptly wrote back, apologising for Ella's less-than-satisfactory experience. They told her that the company would re-visit its training practices and ensure that Nordstrom salespersons were educated better on the many looks the store offers. When television networks like CNN and NBC picked up the story, Pete Nordstrom stepped in to apologise to Ella in interviews, assuring her that in future, Nordstrom would also stock fashions that were more modest. Said Nordstrom: "She did us a favour."

The way Nordstrom reacted to Ella's letter wasn't unique. The family-managed chain has long nurtured a reputation for delivering customer satisfaction. B-schools routinely teach case studies on how Nordstrom trains its sales staff to go the extra mile to keep customers happy.

The urban legend runs that if a customer can't find a pair of shoes she wants in her size, the Nordstrom salesperson will call around all the other stores. If the shoe is out of stock in the chain, the sales person will call a competitor's store, order it, and get it delivered to the customer.

What was outstanding was the manner in which Nordstrom took negative feedback from a customer, and turned it into an opportunity to create a positive image. It was possible because at Nordstrom, the line between customer feedback and top-management is the shortest distance between any two points in the organisation. How many companies do you know where the CEO steps in to take responsibility and make amends publicly?

The Nordstrom case underlines the importance of understanding that the customer feedback loop should end where it begins: with the customer. Most companies have feedback mechanisms. Many take them seriously, and use the data they gather to improve products and services.

Few, however, make the effort to reassure the customer that they have acted on the message. Without that crucial link, companies lose an opportunity to score brownie points.

Says Susan Hogan, assistant professor of marketing at the Goizueta School of Business: "Giving customers a feedback vehicle is great, but they have to have a positive experience with it. If a company gives customers a feedback vehicle but nothing happens, it is pointless."

Hogan adds an interesting point. Ella had a bad experience at Nordstrom, but what the company did to fix it exceeded her expectations. "It's like a separate customer experience, where this time, Nordstrom went above and beyond," explains Hogan.

"That's a lesson for other companies. The feedback mechanism is good not only for damage control, but can also lead to more loyal customers if companies use it as an additional opportunity to exceed customer expectations."

Companies often commission expensive surveys to track customer satisfaction levels. However, a smart company understands the symbiotic link between loyalty and customer feedback. Customers who complain are usually loyal folk, who have taken the trouble to get back, and give the company a chance to fix the problem.

Most customers simply vent their spleen over bad experiences by telling their networks of friends and family, which results in the loss of potential customers. Smart companies like Nordstrom don't set up feedback mechanisms alone, but also build a corporate culture that nurtures those mechanisms.

According to Hogan, the Nordstrom episode says a lot about the status of the customer-care professional in the organisation. Usually, the person responsible for customer care is hardly regarded as someone on the fast track.

On the other hand, says Hogan, "If a company sees customer feedback as a gold mine of opportunities, that can be seen in the attention it gives the customer-care centre and the connections it gives the centre to other departments."

The litmus test of the significance of customer care is the rewards and recognition mechanism. Companies that care about customers, care about employees who tackle customer complaints. They treat complaints as gifts from the customers, as Nordstrom did, and reward employees who bring unsatisfied customers like Ella to the company's notice. Moreover, they repeatedly remind customers that their complaints are being heard. Not surprisingly, the customer-feedback mechanism works best when the customer sees it working.

(Manjari Raman is a Boston-based management writer. Her email is manjariraman@yahoo.com)