Customer Is King
The age-old adage that the customer is always right
may not be completely true, but companies that treat their
patrons like royalty are earning invaluable loyalty.
Story by Denise Edgington; Photographs by
There once was a day when business deals were sealed with
a handshake. Credit was extended based on a name, not on account
balances. And the customer was never wrong.
While times have changed, the wise businessperson still shakes
a handbut only after the papers are signed. And the
passing of credit is given only when due. Yet, many feel,
the customer continues to rule.
Marti Ann Schwartz, the Oregon-based, self-titled Consummate
Consumer, travels around the country giving her spiel: In
the old days, businesses understood that without customers
they wouldnt have their businesses.
"Today, nobody believes the customer is right,"
she claims. "Not even the customer."
Iowa business owners beg to differ.
The Early Days
Gone are the days when doctors were considered God-like and
shopkeepers, the smartest men on earth.
Todays consumers are brighter, wealthier, and choosier.
But this transformation didnt occur overnight. It may
have happened quite by accident in the 50s and 60s
when shoppers began earning S&H Green Stamps with their
purchases. For absolutely nothing, or so it seemed, one could
pore over catalogues, ordering the hearts desire.
Coupons became popular. A few cents off of any product would
nearly empty store shelves. It was a time when consumers really
began to expect more for their money, says Joyce Gioia, president
of The Herman Group, a North Carolina consulting firm.
"The problem with adding value is that the threshold
keeps getting raised," she says. "If you have two
innovative ideas, youd be better off to use one now
and save one for next year. Because as soon as you announce
one, someone else will offer it and its no longer more
than what the customer expected."
Gioia offers this example: American Airlines came out with
its AA Advantage Program in the 60s. It was a creative
customer loyalty program. Travelers would earn a free ticket
for every 25,000 miles flown.
Soon thereafter, Continental rolled out its loyalty plan:
A free ticket with every 20,000 miles traveled. Suddenly,
American Airlines program wasnt quite so special.
Free For All
Its a wonder Henry Ford was successful at all. When
he introduced the Model T, each was an exact replica of the
rest. He said his customers could have any color they wantedas
long as it was black.
Ford wouldnt last long in todays marketplace.
According to the Federal Reserve Bank of Dallass report,
in the early 1970s there were 654 vehicle styles. There are
now more than 1,200. And they come in every color from white
to jade to azure blue.
The number of available products and services is phenomenal.
Grocery stores carry about 10,000 different products; manufacturers
put out nearly 5,000 new ones a year. There used to be just
a handful of brand name hotels. Now there are more than 200.
Furniture formerly consisted of tables, chairs, sofas, and
beds. Add entertainment centers, recliners, curio cabinets,
and computer desks and credenzas to the mix and consumers
are shopping for furniture more than once or twice an adult
"You will always have your primary pieces," says
David Merschman, president of Des Moines Homemakers
Furniture. "But now you have all of these new pieces.
Bedroom sets must have companion pieces, like lighted mirrors
or Mr. and Mrs. dressers. Many items have hidden compartments
to hide valuables.
"Curio cabinets always sold well on Mothers Day
and Christmas. Now, every time somebody gets the urge to collect
something, they buy a curio cabinet. People that collect $4
and $5 Beanie Babies spend $400 to $500 to display them."
Retail sales have been either steady or rising for the last
several months. In May, sales totaled a seasonally adjusted
$242.2 billion, according to the Commerce Department. In fact,
the May numbers were 7.8 percent higher than during the same
month of 1998.
Almost every market is making gains. Auto sales jumped 2.5
percent. Furniture rose 1.1 percent. Apparel, accessories,
food, and drugs continue a gradual climb.
The reason for steady growth lies partially in the Baby Boomers
rampant spending habits.
"The Baby Boomers grew up in an age of aplenty,"
Gioia says. "They feel that they dont have to put
as much money away, and they spend a lot on their kids. The
Baby Boomers are expected to inherit $7 trillion from their
parents, but the children of the Baby Boomers will be much
"The Boomers are out buying new cars, new furniture,
and new appliances whenever they tire of the old. All of that
is literally fueling the consumption in this country, which
is fueling the economy, which is fueling competition."
All The Wiser
People may be spending more, but theyre more knowledgeable
about what theyre buying.
"There is a vast amount of information available to
the buying public right at their fingertips," says Sheree
Clark, co-owner of Sayles Graphic Design in Des Moines. "Legislation
has contributed to this by providing guidelines for labeling
products, especially food products, over-the-counter drugs,
and liquor labeling."
Customers, says Arthur R. Bauer, American Media CEO, were
infinitely more naïve than they are now. "People
would look at a how-to video and it had to be reasonably good.
But in our industry, weve had to make dramatic changes.
We are competing with Hollywood and its putting out
quality feature films like Jurassic Park.
"There was nothing like that 10 or 12 years ago, but
now people have come to expect Jurassic Park quality in their
Jeff Chelesvig, general manager of the Des Moines Civic Center,
understands. Hes challenged each theater season with
providing the best quality of showson- and off-Broadwaythat
he can muster. People, he says, will pay for quality.
The president of Adventureland Amusement Park works hard
to provide fresh entertainment for its 550,000 visitors each
season. "Our business hasnt changed greatly,"
says Jack Krantz, "but weve changed. We have to
bring something new to the people each year."
For instance, Krantz added a circus to the park three years
ago. The first year it featured trapeze artists and animals.
Last season, it was made up mostly of exotic animals. Guests
over the 1999 summer saw practically all trapeze acts.
"Consumers are still looking for wholesome family entertainment,
and for that reason, amusement parks have become even more
popular in the last ten years," he says. "Now, its
not unusual to find three generations coming through the gates
at one time.
"Ill go to the carousel, a kids ride, and
Ill see grandma and grandpa sitting on horses, riding
around, licking ice cream cones. An amusement park is one
of the few places that everyone can still be a kid."
Delivering The Goods
Tom Boesen, former president of Boesen the Florist and now
senior vice president of its parent company, Gerald Stevens
Co., says products in the floral business have changed little.
The movement has been in speed of delivery. A call to an 800-number
can send flowers around the world in hours.
"Some people call the florist at 9 a.m. wanting their
flowers delivered by 10. Were not making pizzas here
and there are too many recipes to do that, but we try."
Boesen says that in days past, one would be hard-pressed
to find a florist open on a Sunday. Now, orders are taken
via phone by live operators 24 hours a day. Bouquets stand
ready in many supermarkets seven days a week. And the internet
is available at any time.
By the year 2002, more than $500 billion in commerce is expected
to transpire over the internet. According to eBusiness World
of Phoenix, customers will benefit from greater choices and
enhanced convenience. Brands will become increasingly important,
costs will drop, and competition will multiply again and again.
"The internet will radically change the way we do business,"
agrees Bauer. "Imagine going to a car dealer, getting
a price, clicking on the internet, and finding the best price
in the country.
"Its kind of scary for the businessperson. Were
going to have products sold like commoditiesat little
profit levels. Im not selling corn or auto parts. We
do the research. We assemble the product."
A study by the Chicago-based Leo J. Shapiro & Associates
reports that 11 percent of all households bought goods over
the internet during the 1998 holiday season. Of those people,
72 percent said they would increase their number of purchases
this year. And nine percent more people will be buying off
the web in the next few months.
Bauer doesnt worry that the internet will eliminate
shopping as we know it. The social aspect of shopping will
"I have a 1924 article here from Popular Mechanics,"
he says. "FM radio had just been introduced. The article
says that within a decade schools will begin to close because
kids will get up and listen to the radio and become educated.
"Of course, that hasnt happened. Technology may
get bigger, but everything else around grows too."
In Search of the Hook
Most consumers drown in marketing messages each day. From
billboards to radio and TV commercials to direct mail to internet
advertisements to telemarketers to storefronts, theyre
everywhere. People learn very quickly to tune out these messages,
says Clark. Her challenge is to help businesses find non-traditional
approaches to marketing.
"Everybody is clamoring to get attention," she
says. "There are ads on the back of bathroom doors and
in some airplanes. You have to find a new avenue for marketing."
Take the toy store Alphabet Soup. At Easter, it created a
ready-made Easter basket. Not necessarily a novel idea, but
certainly one that saved time for its customers. Especially
for those people who dont have kids of their own, says
The Civic Center of Greater Des Moines dug into a hat of
old tricks when it presented a direct mail piece that promoted
its new subscription series. Each included a CD with a sampling
of the musical scores for the upcoming shows. It was the old
"try it before you buy it" theory, but Clark says
it was very clever and, perhaps most important, effective.
"Sometimes the toughest thing for us to do as marketers
is to convince our clients that risk taking is important.
Companies must stay innovative to get their messages to the
Clark cites Des Moines coffee house Timbuktuu. Owner Charlie
Bienert put his trust in Sayles Graphicand it worked.
All of his furniture, packaging, menus, and wall designs were
custom made. Even the company name gave Bienert a sound and
look all of his own.
Caseys General Stores CEO Don Lamberti says his companys
success lies in remaining constant. His customers expect clean
stores, adequate parking, and the ability to get in and out
quickly. Hes responded by giving them time.
The chain of 1,190 stores eliminated barcode scanning. "Scanning
created lines at some of our busiest stores. Our clerks could
key in three or four items before customers could set them
on the counter. Even though we like the category management
that scanning provides, well take care of it at the
distribution center rather than at the expense of customer
At one time, Lamberti says, people would wait for an available
gas pump if the parking lot were full. Now, even loyal customers
will drive by if they cant get in and out immediately.
Lambertis theory of speedy service is working. This
year, Caseys will sell 91 million doughnuts, 7.3 million
pizzas, 50 million cups of coffee, and 700 million gallons
Bowing to Desire
Consumers really do know what they want. They want value
for their money, to save time, and to be treated with respect.
"Customers arent always right," says Schwartz.
"But if you treat them as a valued part of your business,
theyll beat a path to your door."
Gioia suggests that businesses teach their employees how
to create experiences for guests. Educate salespeople to become
consultants. They must know your products from inside and
out. "People love to buy, they just dont like to
be sold," she says.
An owner of a coffeehouse in Greensboro created games, like
crossword puzzles and treasure hunts. Each game helps her
workers learn everything there is to know about the products
"Information is important all the way around,"
says Gioia. "Well see more events taking
place at retailers. Boutiques will offer seminars for women,
similar to what bookstores are known for. Health clubs are
branching out beyond fitness. Theyre holding seminars
for nutrition, time management, and stress reduction."
At the Des Moines-based Bankers Trust customers are getting
one-on-one treatmentcourtesy of the return to relationship
banking. Staff positioned in cubicles have replaced teller
"By building relationships, weve increased the
number of our product sales, and weve decreased wait
time for our customers," says Senior Vice President Paul
Erickson. "We have more people performing more job functions,
and the benefit is that customers can come in and sit down
to make a deposit."
The bank promotes its customer-friendly atmosphere with a
locally owned name guarantee. If it ever changes its name,
customers will receive $100. The tactic is paying off. In
just four months, Bankers Trust added 2,400 new checking and
Loyalty offered reaps the same, according to Gioia. Give
people what they dont expectmore than your competitors
down the street. Offer special pricing. Give a perk or two.
Make each customer feel that she is the most important person
in the store. "Consumers want to feel good and they want
to feel like their dollars are well spent," Gioia says.
"If they dont feel that way, theyll pick
up their pocketbooks and move on to your competition. Its
as simple as that."
Denise Edgington also wrote the
piece on recruiting a minority workforce in this issue.