Amaze Every Customer Every Time Page 2

  And I have seen a whole lot come and go in that time. Three decades ago, we had certain brands and certain companies that stood out as being the true “rock-stars” when it came to building customer loyalty and market dominance.

  The “rock-star” brands of that time, the ones best known for their superior customer service, were companies like IBM, Delta Airlines, and Eastman Kodak.

  Let’s think about this for a minute. IBM is still around, and it is still one of the most successful, most admired companies in America. If it no longer stands out the way it once did as one of the top few service companies in the country, it may be because its market has changed in ways that were impossible for anyone to predict, and because its level of visibility has changed too. In the areas in which it competes, IBM maintains a strong reputation for customer satisfaction that is worthy of its proud history, but it’s not the global rock-star brand for customer service that it was during the 1980s. In other words, there are not as many businesses today trying to emulate IBM as there used to be.

  Delta Airlines is still up and running, but ask yourself: How many people now look to that airline as a shining, reliable example of great customer service? I believe there’s really only one rock-star airline in America right now, and it’s not Delta. (It’s Southwest Airlines.) In the years since its glory period, Delta has gone through a bankruptcy, and like a lot of the big carriers, it has some ill will to deal with in its customer base. Let’s be frank. Most of the airline industry is struggling in terms of its customer satisfaction levels—and just about everything else.

  What about Eastman Kodak? Well, something went off track somewhere along the line, and in 2012, it filed for Chapter 11 bankruptcy protection. So you probably can’t consider it a rock-star customer service company anymore.

  My point is that what’s trendy, what’s sexy, and what’s “hot” is not always a good indicator of a company’s long-term philosophy about its customers, or its ability to deliver on that philosophy. It is not necessarily a good role model for the rest of us. Some companies get hot for a while, then seem to cool off, and maybe even go out of business. Meanwhile, other companies with far longer, more impressive, and more relevant records of performance get ignored.

  Today, if you asked 100 businesspeople to name the top customer service companies in the country, most of them would name the rock stars of today. They’d name companies like:

  Apple

  Southwest Airlines

  Ritz-Carlton

  Nordstrom’s

  Amazon.com

  Those are today’s “sexy” customer service companies, and don’t get me wrong, they’re all doing a great job. My only question would be: How do we know which ones are likely to still be doing a great job 30 years from now?

  What if we thought about a different kind of rock star in the arena of customer service and business success?

  What if we could identify a company that has consistently been on the right track philosophically, and successfully executing according to that philosophy, for the last 70 or 80 years? What if we went looking for a company that’s been offering “proof of concept” on its commitment to customer service by winning just about every customer service award possible for the better part of a century? What if we could find a company that delivered on a brand promise so powerful that it was able to compete—and win—in one of the toughest sectors of our economy, against industry players with far more money to spend?

  Well, if we did that, we’d end up face-to-face with a new kind of rock star in the world of customer service—one that might not have as much glitz and media buzz but had a much better chance than anyone else out there of sharing strategies that were relevant today and tomorrow, for companies big and small. We’d be looking at a company that had succeeded in building amazement into the DNA of the business.

  We’d be looking at Ace Hardware, which is not only an undiscovered rock star after about 89 years on tour (as of this writing) but also solid as a rock. Year in and year out, decade after decade and generation after generation, this brand has stood the test of time, which counts for a lot in my book. And since that’s what you happen to be reading, let me tell you some things you might not know about Ace.

  YOU KNOW ACE …

  BUT DO YOU REALLY KNOW ACE?

  If you are reading these words, you almost certainly have some history with Ace Hardware. As of this writing, there are more than 4,600 Ace Hardware stores in over 70 countries. I bet you’ve been in at least one of them, and I bet you’ve seen plenty of Ace commercials on TV. It’s such a familiar part of the landscape, in fact, that you probably think you know Ace Hardware.

  But I’ll bet you don’t.

  I’ll bet you didn’t know that, with the exception of 85 of the 4,600 stores, they are all locally owned and operated. The person who owns and runs that Ace store in your neighborhood is a member of your community. He or she pays taxes to the same local government you do, sends kids to the same schools you do, and votes at the same polling stations you do.

  I’ll bet you didn’t know that each one of those locally owned stores is part of a multibillion-dollar buying group.

  And I’ll bet that you didn’t know that Ace is one of the national leaders in customer satisfaction across all sectors. You may not even have known that Ace is the clear leader in customer satisfaction in the brutally competitive retail hardware sector—and has been for years.

  Just so you can get some clarity about the level of achievement I’m talking about here, take a look at this announcement from J.D. Power and Associates, the leading US market research firm in the area of customer satisfaction, product quality, and buyer behavior:

  Ace Hardware Ranks Highest in Customer Satisfaction among Home Improvement Retailers for a Sixth Consecutive Year. Ace Hardware performs particularly well in the two most influential factors: staff and service and store facility.1

  So now you know: I’m not making this up. Even though this company often flies “under the radar,” Ace has been identified as No. 1 in customer service, year after year, in a highly competitive industry—retail hardware—by the top research firm in the country. And there are plenty of other sources that have given Ace this kind of ranking for years. According to a recent Bloomberg Businessweek report, Ace ranks in the top ten among all US brands for customer satisfaction. That means Ace is hanging with names like Apple Inc., L.L. Bean, and the Four Seasons luxury hotel chain.

  Clearly, the people at Ace are doing something right. If you’re curious about what that “something right” might be—and whether it could possibly be relevant to your company—read on.

  DAVID AND GOLIATH

  Over the past year or so, a lot of people have asked me what the follow-up volume to my New York Times bestseller The Amazement Revolution was going to be. I have to tell you, when I told people it was going to be about Ace Hardware, I got some strange looks. Not only that, I got a lot of puzzled follow-up questions, most of them variations on “At this point in your career, you could write about any company you want … so why in the world would you choose to write a book about a hardware store?”

  There are a lot of possible answers to that question: I’ve personally gotten great service from Ace for many years. It’s an underappreciated brand. It has stood the test of time. And so on. But my favorite answer of all has only three words: David and Goliath.

  Let me explain what I mean by that. According to the experts, the retail sector seems to be going in one direction: super-big stores that descend on major population centers with low, low pricing as one of their major strategies. Think of the most recognizable players: Walmart, Sam’s Club, Office Depot, and so on: big boxes and heavy discounts.

  That’s the model that hardware competitors like Lowe’s and Home Depot are betting the big dollars on. Each of them is committed to building a big company with a centralized command structure that offers consumers big inventory, big floor plans, big parking lots, and big discounts—so the company can win the har
d-earned dollar of the consumer who wants the lowest possible price and the widest possible selection of home improvement products.

  Isn’t “big is better” the mantra now? Isn’t that the “new normal” in which the retail sector is supposed to be operating? Most of the experts would say “Yes.” If you were betting and asked the experts for advice on the smartest bet, they would tell you to bet on Goliath to beat David, every time.

  So, if those are the rules this industry is supposed to be playing by—and a lot of smart people tell us that those are the rules—what would you bet the marketplace would do to a player like Ace? After all …

  Ace offers competitive pricing, but typically doesn’t offer consumers the lowest possible price.

  Ace, in almost every location, has no huge stores or supersized parking lots.

  Ace’s stores (as I’ve mentioned) are almost all locally owned and operated—some of them far removed from major population centers. In the 21st-century retail sector, that’s an anachronism! You don’t typically bet on smaller, locally owned stores (outlets that some might consider “momand-pop” stores) to beat the big chains!

  If it were your hard-earned money you were betting with—and you’d never seen this book—you’d agree with the experts. Go ahead, admit it. If it were your money, you’d bet that Ace would get beaten, and beaten badly, by these bigger stores with bigger advertising and marketing budgets. That’s what most people I talk to predict when I ask them this question.

  Here’s the reality. Consumers have become extremely price sensitive. They are skeptical and conservative, because everyone in retail is promising great service, but very few retailers are actually delivering anything that can persuade consumers to make buying decisions based on anything besides price. Yet in 2011, a year when the retail sector as a whole was struggling to adapt to this newly price-sensitive consumer, Ace somehow grew its revenues at a much faster rate than its big-box, discount-driven competitors.

  Lowe’s grew annual revenues by 2.9 percent, Home Depot by 3.5 percent. And Ace? Our under-the-radar rock star grew revenues by 5.1 percent. For what it’s worth, Ace also outpaced both of those huge competitors in terms of employee growth during the same period. You can check the numbers for yourself; they’re all out there.2

  How did David beat Goliath?

  •••

  My answer starts with a disclaimer. Yes, I know that not every Ace Hardware store always executes 100 percent on the best practices they’re supposed to execute on.

  You know what, though? I don’t really care about that.

  Why not? Because I’m not at all that interested in what happens in a small minority of the Ace stores.

  I’m interested in what happens in most of the Ace stores, because in those exemplary stores lies the answer to the question of how David beat Goliath. I’m interested in which company is still going to be around 30, 40, even 50 or more years from now. I want to know which strategies for building customer satisfaction and loyalty are working right now and are built for the long haul—for big businesses, small businesses, and everybody in between.

  That’s why I picked Ace. It has demonstrated over and over again—in fact, for nearly a century now—that it lives by, operationalizes, and evangelizes a powerful, customer-focused and helpful culture that’s built for the long haul.

  Ace has built into its operation that customer-focused culture so well that it is capable of delivering higher-than-industry customer loyalty across its whole network of stores. That means Ace is building and supporting a customer-focused culture on the vast scale of a major global brand (which Ace is), and it also means Ace is creating and maintaining that customer-focused culture on the small scale of a local independently owned business.

  Ace has been beating Goliath for decades. Its secret for doing so is vitally important to anyone who has competition.

  •••

  How do you survive and thrive in an industry where your competitors are outspending you on a regular basis? Ace has figured that out.

  And you know what else? Ace has figured out an answer to that question that is just as accessible to the strategic leaders of major global brands as it is to a network of local entrepreneurs. This culture is custom-built for people who want to compete—and win—in business. Having worked with Ace for many years now as both a consultant and a speaker, I can tell you that this culture is not only custom-built for a diverse group of local hardware store owners; it is also custom-built for you.

  * * *

  YOU ARE ACE.

  You may not have realized it, but you are Ace, and here’s why:

  Ace is a successful small, medium, and large business—simultaneously.

  Ace is primarily locally owned and operated by independent business owners … and it is also driven by core standards and practices that are set by headquarters.

  Ace is a local community-driven brand … and it is also a global multibillion-dollar brand.

  Ace is a business-to-consumer brand … and a business-to-business brand.

  So, what does that mean to you?

  If you are a solo entrepreneur with just one or two employees, it means you will find in this book the right recipe for building a customer-focused business.

  If you are small- or medium-sized business, it means you will find in these pages the right recipe for building a customer-focused company.

  And if you are part of a larger national or international brand, it means you will also find here the right recipe for your customer-focused organization.

  You are Ace!

  * * *

  Can you imagine every Apple store being locally owned? That’s the kind of company we’ll be looking at in this book. A company that’s big, small, and every size in between. A company that’s built up powerful customer loyalty that transcends narrow price positioning. A cutting-edge company that’s been executing successfully on a powerful promise—and winning rave reviews from its customers and its network of owners—for 85 years.

  How do they do it? I’ll give you a hint. They win on people.

  Most of us in business today need to take a closer look at the neglected art of winning on people. Sometimes we can’t offer the lowest price. Sometimes we can’t deploy the biggest advertising and promotional budget. Sometimes we don’t have the biggest inventory. We might not win on any or all of those things, but we can win on amazement, which means winning on people.

  Ace wins on people. Ace wins on amazement. Delivering on amazement in the marketplace is all about caring about the people inside your company: supporting them on the inside and helping them to deliver on the outside. If you are ready and willing to find a way to create loyalty in the marketplace based on the amazement of the customer experience you deliver, if you’re willing to bet on David beating Goliath, then congratulations! You are Ace. And I wrote this book for you.

  So far, you’ve read about some of the great things Ace is doing. I have written this book to show you exactly how to do those kinds of great things in your own company, whatever its size, so that you, too, can win in the marketplace and outgrow your competitors—even if they have been around a lot longer than you have, or have more customers than you do, or have thirty times as much to spend on marketing as you do.

  If that’s what you’re here for, you’ve come to the right place. You are about to learn how to …

  AMAZE Every Customer Every Time!

  YOUR AMAZEMENT TOOLBOX

  Rock-star brands may come and go, but brands that are “rock solid” stay around.

  Ace Hardware is not a franchise. It is a network of privately owned stores.

  Ace is a national leader in customer service across all business sectors, not just hardware.

  According to a recent Business Week report, Ace Hardware ranks in the top ten among all US brands for customer satisfaction.

  Even though big-box competitors outspend Ace in advertising by as much as 30-to-1, Ace beats these competitors in revenue growth.

 
Ace lives by, operationalizes, and evangelizes a powerful, customer-focused culture that’s built for the long haul.

  Ace wins on people and on amazement. Delivering amazement in the marketplace is all about caring for the people inside your company.

  1 J.D. Power and Associates press release, May 4, 2011.

  2 See Yahoo! Finance and The Home Depot annual report.

  CHAPTER THREE

  PEOPLE WITH THE PASSION TO SERVE

  * * *

  What do you stand for? What’s important to you? Whatever it is, that’s what you want to be known for.

  SO, ACE IS NOT JUST a successful global brand but also a successful small business: almost every store is locally owned and operated. All of the stores I spent time with were notable for the presence of people who wanted to be there. People who loved doing what they were doing. People who had a passion to serve.

  How awesome is that?

  In the last chapter, I showed you why I believe Ace’s record of success in the marketplace, and particularly its long history of competing successfully against much larger, better-capitalized competitors, makes it a great role model for start-ups, family businesses, and global brands alike. You may not have realized how much you had in common with this company—which is both big and small; which is engaged in both business-to-business and business-to-consumer; which is both locally entrepreneurial and centrally managed—but now you know: Ace touches a lot more bases than you may have thought.

  In this chapter, I want to show you why you want to be Ace, regardless of what business you happen to be in.

  Ace is a new kind of corporate rock star: a top-tier competitor that is solid as a rock because of its demonstrated ability, for nearly a century, to fuel financial success on the big scale and on the small scale. How do they do it? With a culture built firmly on the foundation of excellent customer service.