Customer Relationships
Nordstrom, Inc. has long enjoyed a reputation for providing superior customer service. This paper examines Nordstrom strategies that the retailer employs to build customer relationships and promote customer loyalty.
Nordstrom is one of the nation's leading fashion specialty retailers, with 204 stores that are located in 28 states. It was founded in 1901 as a shoe store in Seattle, and today operates 115 full-line stores, 86 Nordstrom Racks, two Jeffrey boutiques, and one clearance store. Nordstrom also serves its customers through its website and through its catalogs (Gonzales, 2).
Nordstrom's business strategy has been called "greed through love" (deFelice). The 110-year-old retailer owes its success to customer-friendly policies that are well-known, widely admired, and frequently imitated in the U.S. retail industry. Nordstrom employees work to form customer relationships, and the company is known to have one of the most customer friendly merchandise return policies in the global retail industry (Farfan, 1).
In addition to its generous return policies, Nordstrom customer relationship strategy includes other tactics. According to deFelice, Nordstrom is willing to take risks and do unusual and often expensive favors for shoppers, even accepting returns on items not even purchased there. But such big risks often yield big gains. Word starts to spread that Nordstrom is doing crazy things for its customers, and they tell their friends. Pretty soon, this word of mouth or viral...
That method of marketing is statistically shown to provide better results than basic brand advertising (deFelice, 1).
One of Nordstrom's former top salesmen, now retired Patrick McCarthy, described his efforts to build customer relationships. To help keep track of his 12,000 customers, McCarthy kept a personal customer book, some of it on paper, some of it in his head. Now however, employees keep records electronically. Salespeople can be alerted when unusual sizes and shipments will be coming in, and they can be reminded to call customers when alterations are ready. Nordstrom's relationship management system also tracks inventory electronically, so that salespeople can quickly determine which nearby stores may have a particular item that they don't have, all without having to call several numbers on a list (deFelice, 1).
McCarthy also enthusiastically describes a Nordstrom culture of empowerment. According to Robert Spector, McCarthy's co-author of The Nordstrom Way, Nordstrom gives their people on the frontline the ability to make decisions, and then gives managers the ability to back them up. Spector also claims that Nordstrom has but one rule: use your good judgment in all situations. Spector explains that Nordstrom management believes that the more rules you have, the farther you get from the customer. As Spector reports "Nordstrom has a consistency of purpose. That's key. It comes down to hiring the right people and then truly empowering them to take care of…
