I recently read a fascinating book titled Good Company by Arthur Blank, co-founder of The Home Depot (“HD”). Together with his partner, Bernie Marcus, Arthur ran HD until around 2000, at which time he stepped down. For the last nearly 20 years, Arthur has owned and operated the Atlanta Falcons, as well as various other sports and recreation ventures. As you may remember, through the 1980s and 90s HD experienced meteoric growth as it expanded rapidly across the country from its humble beginnings in Atlanta. The book is an easy read, and shares a variety of interesting stories and anecdotes from Arthur’s business and philanthropic life. But one theme in particular from the book really resonated with me: Arthur’s relentless focus, I would even say fixation, on staying close to the customer, listening to the customer, and doing what’s best for the customer. This wouldn’t be so impressive if HD was a single store where the owners were present every day; but given that Blank maintained this focus, this discipline, as he and Marcus added thousands of stores nationwide, I found it both impressive and inspiring. So let me share a few of Arthur’s stories.
The first story I’ll share involved Arthur and Bernie finding a way to continue to get direct, firsthand feedback from customers even as the company grew. They decided to hang a sign in every store that read “Are you satisfied? If not, call Ben Hill”, followed by a phone number. What the customer didn’t know was that there was really no Ben Hill! Instead, when a customer called that number, the call was routed directly to Arthur, Bernie, or their other partner Pat Farrah. Arthur or one of his partners would personally listen to every angry, disappointed or frustrated customer, taking notes, not debating or defending, just listening and receiving feedback. They would then follow up with the appropriate store manager. Hearing from disgruntled customers gave them more insight into how they could improve their business than hiring a consultant to survey customers, asking store managers for feedback as to how they thought the company could do better, or any other “feedback mechanism” they could think of. Hearing directly the unvarnished complaints of customers gave them a treasure trove of priceless information, which drove continuous improvement and better customer service throughout the company.
The second story involved a store that HD opened in Anchorage, Alaska. A local competitor just down the street named Eagle Hardware was killing them. Eating their lunch. So HD’s head of marketing, Dick Sullivan, gathered all 100 associates from the HD Anchorage store together and asked what was going on, why the HD store had only a 10% market share compared to Eagle Hardware’s 60%. The answer came back that the HD “corporate” folks down in Southern California were making all the purchasing decisions regarding inventory for the Anchorage store. But they didn’t have a clue as to what was most important to the folks in Alaska! Here’s one example. As it turned out, the “full-spectrum daylight light bulb with Vitamin D” was the best selling item during the dark Alaskan winters. Now, sitting down in sun soaked Southern California, it’s not surprising this didn’t occur to the headquarters purchasing folks. But to an associate living in Anchorage, it was just common sense. So the store immediately added these light bulbs to their offerings. This story drove home to Arthur the importance of acting on local knowledge. From then on, Arthur and the centralized purchasing team listened a lot more closely to the folks on the floor of individual stores!
Finally, Bernie Marcus tells the story of how one of golfing buddies tried to warn him that one of the sales folks in his local HD was driving away business. Evidently this friend had gone in to buy a $200 faucet, but the HD sales person ended up educating him on how he could fix his existing faucet for $1.50. Bernie’s friend thought this was terrible. Imagine, this HD associate losing such a sale! Well, rather than getting mad at the employee, Arthur and Bernie ended up giving the guy a raise. That’s exactly what they had trained the sales person to do. Take care of the customer, look out for his interest, and when the time comes, he will trust you with a larger purchase (maybe a whole kitchen?).
As we grow at Baillie, I’m often haunted by whether we’re staying close enough to the customer. Are we continually listening, making decisions at the lowest level possible, and looking out for the customer’s best interest? I hope so, but I’m not always sure. I challenge you to take an honest look at how your own organization is doing in these areas. I’m confident you’ll find places where you can listen to your customer more closely.
