Nordstrom Retailing Management Answers
Retailing Management – Case 31 Customer Service and Relationship Management at Nordstrom 1. What steps does Nordstrom take to implement its strategy of providing outstanding customer service? To begin with, Nordstrom employees treat customers like royalty. Customers are even at the top of Nordstrom’s so-called organization chart. All lower levels work towards supporting the salespeople, who in turn work to serve the customers. Salespeople are given personalized business cards to help them build relationships with customers.
They are not tied to their respective departments but to the customers, this turns their salesperson a “personal shopper” of the customers. This opportunity to sell departments enables salespeople to maximize sales and commissions while providing superior customer service. Despite all the efforts in making sure customer satisfaction is met, it starts from the employees. Nordstrom employees are treated almost like the extended family. They are treated like businesspeople and empowered to make independent decisions. Overall, Nordstrom delivers good quality product with good service. 2.
How do these activities enable Nordstrom to reduce the gaps between perceived service and customer expectations, as described in Chapter 18? Nordstrom’s policies focus on the concept of the “Life –time Value of the Customer. ” Their service goes above and beyond what other retail stores can offer. Even if little money is made from the first sale, the lifetime value of a customer is calculated, and the positive dollar amount of a loyal customer is staggering. A customer can expect equal level of respect from all departments from each employee. They will also experience a “personal shopper” who can help them with which product to purchase. . What are the pros and cons of Nordstrom’s approach to developing a competitive advantage through customer service? The number one pro is customer loyalty, because of Nordstrom’s above and beyond customer service; customers come back for the good quality products and to the experience of good salesperson. Because of customer loyalty, Nordstrom realizes huge revenue from repeat customers. And another pro is having a great employee; Nordstrom empowers their employees to be individual businesspeople who can make their own decisions within the stores. Because of this, Nordstrom’s hrinkage or loss due to theft and record-keeping errors is under 1. 5% of sales—roughly half the industry average. The only con is the loss money from returns or refunds. Nordstrom’s policy concept of “Life-time Value of Customers,” sometimes brings them to loss revenue or even negative revenue. Some customers may even abuse the fact of how easy it is to return merchandise even if it was heavily used. But the weight of a positive dollar amount of loyal customer versus loss revenue is heavier. And therefore there isn’t really a con to how Nordstrom caters to their customers and as well as employees.