Customer Service Hero: Trader Joe's
Categories: Corporate Culture | Creativity | Customer Service | Leadership | Competitive Advantage
Posted by
Paul Orfalea
at
6:17 PM
4
comments
When was the last time an anonymous customer wrote a song and produced a music video praising your company? This YouTube video, called "If I Made a Commercial for Trader Joe's," has been viewed over half a million times.
Trader Joe's, a quirky, southern California-based grocery chain, appears alongside such companies as BMW, L.L. Bean, Amazon.com, and American Express on Business Week's 2009 List Of Customer Service Champs.
Over the years, Trader Joe's outstanding customer service has been attributed to its hiring choices (in The Supermarket of Struggling Artists, we learn how the retailer hires in the image of its customers), its high degree of local flexibility (in this story, a local store delivers food to a snowed-in octogenarian at no charge), and a business model that incorporates "...value, rareness, inimitability, and non-substitutability," according to the Graziadio Business Report.
Fast Company took note of Trader Joe's organic approach to customer service back in 2004, praising the company for its listening skills. The article explores how individual stores and coworkers act locally to respond to customer requests, ranging from product selection to store hours. They don't use focus groups, 800 numbers, or online forms - they just talk to their customers every day.
I think the company's success can be summed up in one word: Integrity. Trader Joe's knows who it is and who it wants to be. The company put a stake in the ground at its founding and has stayed true to its vision of friendly, human interaction. As my West Coast Asset Management colleagues and I wrote in 2003, "People talk about a trip to Trader Joe's as an EVENT. A quirky alternative for those who love to experiment with an ever-changing inventory, Trader Joe's offers gourmet fare at discount prices, and does so with humor and personality." Because it is not afraid to have a personality, Trader Joe's does not appeal to everyone, but its friends are loyal to the company, and the company is loyal to its friends.
Understanding its niche and maintaining its integrity has grown the company from a single store in Pasadena, California, to 339 stores in 25 states, and over $7 billion in annual sales. To provide outstanding customer service, it's essential to know who your customers are. Trader Joe's reminds us that it's also important to know yourself.
Comments
Brian Chung wrote on 03/03/10 10:32 PM
I absolutely agree with you Mr. Orfalea. Trader Joe's is an event whenever I go and I really do appreciate their integrity, listening skills, and good prices. I wonder how much of an effect the quirky personality of the store has impacted the success of Trader Joes.
Arezo Yassai wrote on 03/03/10 11:36 PM
What Trader Joes did for the snowed in customer was absolutely amazing! I have always noticed the colorful sales people and friendly employees, but did not know the extent of which service was a part of their success as a grocer. I attributed a lot to the overall design and feel of the store, but in retrospect I can see that the diversity in the employees has a lot to do with the ambiance of the store as whole. My biggest take away was that a big firm like TJ does not conduct focus groups and relies simply on strong communication from customers to employees on to upper management.
Kai Stephan wrote on 03/04/10 6:18 PM
One of my favorite parts about Trader Joe’s is how they bag groceries. Now I know this may sounds weird, given that people would usually rave about the quality foods, but they are exceptional at efficient packing. Go to Ralph’s, and they throw items carelessly into numerous plastic bags, often giving each item its own bag. Apart from a lack of conservation, this simply just makes it hard to carry all the groceries into one’s house from the car. Trader Joe’s packs each item carefully and neatly into a bag so that it is full, and can even stand up on its own! This trivial, forgotten art is one of the top reasons I, and I’m sure many others, shop at Trader Joe’s.
Another interesting business technique they have is not using coupons. Almost all other groceries stores send out flyers with coupons for various products. Trader Joe’s not only doesn’t send out coupons, I’ve never seen a print advertisement for them. This is probably because of a combination of two reasons. First, Trader Joe’s understands that in an age of being overburden with information, whether junk post mail or junk email, people get overwhelmed and immediately throw the flyers out without consideration. Thus, the cost of creating, printing, and mailing coupon flyers outweighs the profits from gaining new/more customers. Second, Trader Joe’s exceptional customer service and food quality speaks for itself, and making its customer’s rave about the store. This is seen with the YouTube video Paul pointed out. They don’t need to do heavy advertising because they already have the best marketing team on earth- their customers.
Zack Porter wrote on 03/03/10 5:13 PM
Trader Joe's is a great example of having a strong corporate identity structured in a manner that delivers unique benefits to its clearly identified customers. By knowing who you are, what you stand for, and who you are trying to help, processes and product offering fall into place.
Trader Joe's has done an excellent job of identifying the people component of their business. By understanding that people do business with people they like, the store has created a very loyal and dedicated following.