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Unit 3: Customer Accommodation

provide pick price repack services for manufacturers to accommodate the unique product Notes
configurations required by different customers.

Self Assessment

State whether the following statements are true or false:

13. Firms typically assess their customer service performance relative to how well these
internal standards are accomplished.
14. A supply chain perspective and a customer success program do not recognize that logistics
executives must alter this focus.
15. Warehouses, whether private or third-party, can be utilized to perform a number of
customization activities.

16. The notion of value-added service is not a significant development in the evolution to
customer success.



Case Study Nordstrom Uses People Profitably

henever customer service is discussed, department store Nordstrom is always
quoted. This Seattle, US-based chain has over 60 stores in Washington, Utah,
WOregon, Illinois, California, Alaska and Virginia. It is now a legend in having
created a culture of the highest standards in customer service, and is the most respected
amongst fashion retailers, – and highly profitable. It has been able to develop very high
loyalty amongst its customer base due to its highly motivated sales force and no-questions-
asked returns policy. This case details the ‘Nordstrom way’ in developing customer service
as a highly effective marketing mix and examines the possibilities of Indian firms emulating
them for differentiation, profitability as well as a decisive competitive advantage.
There are many legendary stories of Nordstrom’s depth of customer service. In one, a lady
customer demanded that Nordstrom replace her car tyres. When the customer associate
enquired about the problem she pointed out to him the slogan of the store ‘We take back
goods. No questions asked’ and refused any further explanation. The customer service
associate referred back to the store manager who took the decision to replace the tyres
with brand new ones. Funny thing was Nordstrom never sold that brand of tyres. When
the top management heard of the incident, they did not admonish its manager for
overstepping his authority; instead it gave to every employee a golden pen-stand in the
shape of a tyre as a reminder of what the company stood for – excellence in customer
service – and what all the employees should strive for.

Entrepreneurs: Nordstrom allows its people to operate like entrepreneurial shopkeepers
rather than blocks in a retailing monolith. It gives sales people and managers a wide
range of operational and cost controlling responsibility. This is mostly seen in their
returns policy. The store takes back the sold merchandise, no questions asked, if the
customers say that they aren’t satisfied with them – for whatever reasons. This might be,
and sometimes is, abused by customers but the Nordstrom customer service philosophy
is not to punish the “98 percent for the dishonesty of a few”. The company trains its sales
associates to tell the customer, ‘I guarantee [the return]. The company may not guarantee
it, but I do.’ That’s a great selling tool.
Contd...

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