Letter #94: Sam Walton (1989)
Founder of Walmart and Sam's Club | Message to Associates: Exceeding Our Customers' Expectations
Today’s letter is a letter Sam Walton wrote to an associate about exceeding customers’ expectations. In it, he stresses the importance of exceeding customers’ expectations, shares one example of how they had recently exceeded a customer’s expectations, lays out 7 additional ways they could exceed a customer’s expectations, synthesizes a general approach to customer service for Walmart, walks through an example, and concludes with a bottom line goal.
Sam was the Founder of Walmart and Sam’s Club. He led Walmart to becoming the world’s largest corporation (by revenue) and the largest private employer in the world. This resulted in Sam being crowned the richest man in America in 1985 and his descendants being consistently ranked as the richest family in the world (~$250bn). Today, Walmart is worth more than $400bn and generates over $600bn of revenue.
Relevant Resources:
Letter
More and more, I’m convinced exceeding our customers’ expectations must be our strategy. Working and thinking together, with absolute determination to do it, we can and will do it.
Recently, we had an interesting Saturday morning meeting. We discussed and brain-stormed the effects of specialty stores such as Office Depot, Toys-R-Us, Auto Shack, and others in almost every line we carry and how well we can compete. Our management group offered many suggestions, some of which will be adopted. One suggestion was that in order to compete effectively, we should staff the specialty areas of our store twelve hours a day with knowledgeable and well-trained associates.
This Wal-Mart machine of ours has many advantages over our competitors, but to exceed our customers’ expectations, we simply must find ways to improve. I contend that our team has the capability of delivering exceptional service which will give us the edge we badly need in Sam’s, Wal-Mart stores, dot or Hypermart.
Competition will continue to improve. Our Company’s future survival, in my opinion, depends on our always exceeding our customer’s expectations. Let me cite an example. I am referring to that caring Department Manager of Lawn and Garden in our New Smyrna Beach Wal-Mart store who learned that a customer had purchased a picnic table at an adjacent Wal-Mart. The hardware was not enclosed in the carton and the customer could not get back some 20 miles to our store. Our Department Manager drove his pickup to the other Wal-Mart, picked up the hardware, took it to our customer in the country and helped her put the table together. You talk about expectations over and above – we have a customer there for life!
That is only one example of exceeding a customer’s expectations. With caring attitudes, there are many things we can think of and achieve which will surprise and shock our customers. Our total objective should be to serve our customers every time they are in our store and make their shopping experience enjoyable. Remember, they are our guests.
In my book, these are some of the differences we can and must achieve. WHAT IF…
Every customer received a smile and a friendly greeting from at least 10 of our associates on each shopping experience? That’s our pledge.
Our great People Greeters continued to greet and do that great job up front for us?
We hired and trained all Service Desk associates to handle refunds and exchanges immediately without approval or keying the drawer? (Perhaps $25 and above might require approval.) This would place more responsibility and authority on our people, but I’m betting they would handle it well and our customers would be better satisfied.
Management, CSMs and Support Team members spoke to and appreciated as many of our customers as possible as they finished their shopping experience?
Through our buying efforts, we exceeded our customers’ expectations with quality merchandise and continued to improve our productivity so we could lower prices and offer better values?
We continued to maximize our “Just in Time” Program and through training and improved systems, we always had items in stock for our customers, seasonally and otherwise?
We continued to listen, experiment, and let our enthusiastic and dedicated associates stay on top of the above programs with their unusual sales promotions and VPI programs?
In summary, the above could be called: OUR MOVE TO A TOTAL QUALITY AND A “DO IT RIGHT THE FIRST TIME” APPROACH FOR WAL-MART. If we are going to exceed our customers’ expectations, it will require more authority and responsibility on the part of our associates with a total objective that we completely, on the spot, using good judgment, do whatever is necessary to satisfy that all-important customer WITH A SMILE, no hassles and no waiting.
Consider this example. We’ll call it the “hassle factor.” Imagine if you bought a new pair of shoes at a downtown store. A week later, a sole begins to come off and you take them back. You drive through heavy traffic, spend 15 minutes finding parking space, explain the problem to the salesclerk who says, “We stand behind our merchandise,” and you’re given a new pair of shoes. Question 1: Are you happy? Answer: Well, no, but sure, I have a new pair of shoes and the salesclerk was pleasant enough, but I had to take time out of my day, go to a lot of trouble, and get what I should have had in the first place – in short, the whole transaction was a hassle and neither the salesclerk nor the store did anything to make it up to me. Question 2: What should have been done? Answer: Replace, plus one. Besides giving me a new pair of shoes, the salesclerk should have thrown in a pair of socks or stockings for the hassle, instead of saying, “We will replace inferior merchandise when a customer complains.” Conclusion: The store’s message should be: “We really regret your inconvenience and want to make you happy.”
Our bottom line goal must be: “We must guarantee always that customers will be satisfied with their whole experience of our Company’s products and services, and that it moves on a system of giving our associates complete responsibility for making the guarantee stick. It would end with a process of identifying systems failures, the problems in organization, training and internal programs that cause customer dissatisfaction.”
This message is a little heavy, but if we can achieve most of what has been discussed, look out World! Together, I know we can. Bless you all. Thanks.
—Sam
Wrap-up
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