The Human Factor
It was with great interest that I recently read that Starbucks Coffee Co., still trying to find the right balance between efficiency and effectiveness that will allow it to regain past glories, decided to introduce a new scheduling system for its stores that will have fewer employees working more hours. One of the rationales behind the decision, according to Craig Russell, VP of store services for Starbucks’ U.S. division, is that the move will help keep familiar baristas behind the counter for longer periods of time, which helps to nurture the relationship between the baristas and their regular customers.
I have long thought that the bigger a company gets, the less it appreciates the value of a familiar face for shoppers who walk in the front door. I don’t care what you are selling, the comfort of knowing that you’ve done business with that person before creates a kind of loyalty that is hard to replicate. Or supplant.
Retailers who think that I am overstating the case should think about the stores they like to shop in as consumers. I’m willing to bet that in a lot of cases, there is a face or a name that is associated with the experience.
That used to be the case at Starbucks, and I suspect that the drive for growth made it less of a priority. I can remember years ago going through the drive-through window at a Starbucks in Redondo Beach, Calif., at 6:30 in the morning, and being impressed that the guy taking the orders clearly knew most of the people lined up by name—and by their cars. He was greeting them and anticipating their orders in a way that personalized the experience; when he got to me, he clearly was filing me and my car away in his mental databank, just in case I was back in line the next day.
Jim Donald, the former CEO of Starbucks, always has said that a company is no bigger than its front-line personnel, and I know that this is a central tenet in his management style. But as companies get bigger, systems sometimes become more important than culture, no matter what the priorities of senior management happen to be. Donald may no longer be at Starbucks, but his philosophy lives on. I know this because the other day I walked into my local Starbucks and the guy behind the counter immediately asked me, “Venti skim latte?”
It isn’t hard. It is just about creating cultural priorities within organizations, hiring the appropriate people, and then making sure that they are rewarded for hitting the right notes.
I don’t care if you are shopping for a suit, groceries, a bottle of wine, or just using a dry cleaner. The experience always is better if you like the person with whom you are dealing, and the employee remembers you and at least gives the illusion that he or she likes you. And it doesn’t matter whether you are a chain or a one-store independent. Customers, after all, aren’t really doing business with the chain. They’re patronizing a specific, individual store and will respond better to treatment that reflects this reality.
That’s at least one of the reasons that on those rare occasions that I need new clothing (and my favorite designer, L.L. Bean, isn’t appropriate), I’ll shop at the local Jos. A Bank, because they know me. It’s why I shop at Stew Leonard’s for food, because around almost every corner there is someone whom I know and who says “hello.” It’s why I love one specific wine store, Nicholas Roberts Ltd., in my Connecticut town, because the folks there have made an effort, both through personal interaction and a very canny wine-of-the-month club, to track my habits and preferences. In each case, by the way, it is fair to say that knowledge and personality have more than just added up to my comfort. It’s also resulted in more transactions and a bigger spend on my part.
That’s the real bottom line.
I’m convinced that this is what is happening at the group of restaurants that chef Tom Douglas runs in Seattle.
Some time ago, I was out in the Pacific Northwest and decided to visit the Dahlia Lounge, one of four terrific restaurants operated there by Douglas. But more important than the name of the restaurant or even the cuisine was the human face of the experience, in this case it belonged to a woman named Jacqueline (I don’t know her last name), who waited on us.
She was, quite frankly, the best waitress I can ever remember encountering. She was funny, attentive (but not overly so), and educated about the food. When picking out a wine, I had joked about loving adventure, so when I mentioned that I was torn between choosing the Alaskan troll-caught king salmon (with pea shoot-tomato salad, carrot reduction, Yukon gold potatoes and peas) and the roasted pork loin (with molasses-glazed pork belly, caramelized-onion spoon bread and roasted figs) she simply smiled, took away the menu, and said she would surprise me.
She did, with the salmon. And it was one of the best salmon dishes I’ve ever had. (The wine was a 2000 Chateau Benoit Pinot Noir which would’ve worked with both meals, but was a perfect complement to the salmon.)
It ends up that Jacqueline is a working mom who has a chef husband and a 2-year-old son, and she personalized the meal in a way that was both unusual and uplifting. She knew her stuff, she understood her customers, and she put a great face on an already estimable restaurant.
I’ve had the same experience at Etta’s Seafood, a Tom Douglas restaurant down near the Pike Place Market. There’s a bartender at Etta’s named Morgan (again, I don’t know his last name) who is so good that I make a stop at Etta’s every time I’m in Seattle, which usually is once or twice a year. But when I walk in the door, even after 12 months away, I feel like Norm on “Cheers.” Morgan knows my name, he knows I like red wine (especially Pinot Noir and Syrah from Washington and Oregon), he always recommends something new from the menu, and he makes a place that is 3,000 miles away from home feel like my neighborhood bar.
Doesn’t get any better than that.
It’s all about balancing efficiency and effectiveness, and how the human factor can keep customers coming back for more.
Dillard’s 3Q loss widens
LITTLE ROCK, Ark. Dillard’s reported a third quarter net loss of $56 million, or 76 cents per share, compared to a net loss of $11.3 million, or 15 cents per share, for the same period last year.
Dillard’s ceo, William Dillard, II, stated, “The oppressive economic environment clearly weighed heavily on our results during the third quarter. We continue to take aggressive action to navigate these challenging times. We announced the closure of 21 under-performing stores during 2008, dramatically reduced capital spending for 2008 and 2009 and are executing appropriate operating expense reduction measures throughout the Company. These efforts are not only designed to position ourselves to weather near-term economic uncertainty but also to position Dillard’s well for the long term.”
Net sales for the quarter were $1.508 billion compared to net sales of $1.633 billion last year. Sales in comparable stores declined 9%.
Fred’s sees 3Q income growth
MEMPHIS, Tenn. Fred’s reported net income of $6.1 million, or 15 cents per diluted share for the third quarter 2008, an increase of 32% from net income of $4.6 million or 12 cents per diluted share in the year-earlier quarter.
Fred’s total sales for the third quarter of fiscal 2008 were $418.0 million compared with $419.9 million for the same period last year, with the year-over-year decline of 0.4% reflecting the company’s store-closing program. Excluding stores closed in 2008, total sales from ongoing stores increased 4% over the third quarter of last year. On a comparable-store basis, third quarter sales increased 1.4% versus 1.1% in the year-earlier period.