I’ve talked a lot about how I believe service and long term sustainability is an inside out proposition. I was recently reading a Bloomberg BusinessWeek article about the difference between Costco and Walmart. I think the highlights from this article illustrate my thesis very well. One of the many lessons that can be gleaned from the Costco approach is that you don’t have to be a high end retailer to create positive employee experiences.
Many retailers and low margin operators view their employees as a cost to be minimized and almost always end up under investing in them. If you under invest in your front line resources and they don’t feel enabled or engaged, how are they going to show up to work and create a positive customer experience?
Just think about it logically.
How can you expect a person to come in and create an exceptional customer relationship and develop rapport when that customer may be spending more than what that front line associate makes in a week?
Not to pick on Walmart, but the answer is, you can’t! If you can’t pay your people enough, and you don’t develop them enough, then the only natural solution is to put in 10,000 self-service check out systems, like Walmart is. Another example of an app or a computer displacing a job.
Costco has experimented with self-service check outs but they are removing them all because they have determined engaged and enabled employes do the work much more efficiently.
As the head of Costco says, “As long as you continue to take care of the customer, take care of employees and keep your expenses in line, good things are going to happen to you.”
I think this infographic sums up the Costco lessons and the service is an inside out principle exceptionally well.