Customers and Employees First

Imagine a store that not only provides a variety of quality products and efficient service but also offers employees a bank, a school, a library, a gymnasium, medical care–and a weekly prayer meeting.

Is this a modern business experimenting with new ideas to retain employees? No, it was a late nineteenth- to early twentieth-century business that was far ahead of its time. (In fact, at least the prayer meeting part would be considered politically incorrect today and possibly even lead to law suits!) These innovations were the brainchildren of John, the young businessman whom I introduced in the previous blog post (“A Revolutionary Retailer”).

People conducted business differently in John’s early days than they do today. Retail stores usually specialized in only one or two types of products and had no set business hours. Clerks received no formal training. Clerks and customers haggled over the price of everything. Identical items might have several different prices. People expected merchants to try to cheat them. Merchants always made customers feel inferior; shopping was seldom pleasurable. A dissatisfied customer could not return a product for refund or exchange. The business motto of the day was caveat emptor, “Let the buyer beware.”

But John changed all that–and more. He instituted set hours and stayed until the last customer was served. He hired only the best staff and then trained them extensively in customer service. He marked prices clearly, and identical items had one price, eliminating haggling. He made customers feel important, and shopping became enjoyable. “Courtesy is the one coin you can never have too much of or be stingy with,” he instructed his employees. If a customer was dissatisfied for any reason and could show his receipt, John guaranteed a cash refund.

Moreover, John’s store was the first to have electricity, telephones, elevators, and telegraph service. He pioneered home delivery and telephone ordering. He introduced the use of pneumatic tubes whereby clerks in the various departments could send cash and receive change quickly. He offered the best products; when he couldn’t do so, he hired craftsmen or built factories to make them himself. He conducted special sales. He even built a restaurant inside his store.

John informed his customers through continuous and aggressive advertising. He once admitted, “half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” He read the papers daily, looking for good writers and artists whose work he liked, then he hired them to produce effective ads for him.

He introduced numerous benefits for his employees and their families, including vacations, pensions, bonuses, health care, life insurance, paid training, and extra pay for additional education. He scheduled public concerts, authors’ lectures, art and historical exhibits, and other forms of entertainment and education–all conducted inside his tore during store hours. He had the world’s largest organ built and installed in his store.

In short, John made work rewarding for his employees and shopping pleasurable for his customers. “When a customer enters my store,” John said, “forget me. He is king.” In return, they made him a success. But that success was a mere by-product of an even greater purpose that drove his revolutionary business.

In the next post, I will share more of this great exemplar’s legacy, which extended far beyond his retail operations, and let you in on what he considered the secrets of his success.

[Copyright (c) 2017, Dennis L. Peterson]

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s