The Customer Rules: The 14 Indispensible, Irrefutable, and Indisputable Qualities of the Greatest Service Companies in the World

By C. Britt Beemer and Robert L Shook

Whether you run your own company or work for a large corporation, establishing customer loyalty is a prerequisite for business growth. In The Customer Rules, C. Britt Beemer, a leading consumer research and marketing consultant, and bestselling business author Robert Shook offer practical advice on how to build a robust company culture based on the concept of unsurpassed customer-service designed to increase your market share.

A combination of extensive market research unprecedented in scope, as well as close studies of fourteen companies that excel in the area of customer service, The Customer Rules distills profitable lessons on how to achieve strong customer loyalty. Referencing specific research findings, Beemer and Shook examine the obstacles that too often distract a company's focus from its most important task--providing preeminent service and creating a unique customer experience. The authors then supply fourteen workable solutions to ensure the return of customers time and time again, including:

• Instill the importance of customer service in every employee
• Use a “small-town” approach to meeting customers' needs no matter how big your company is
• Develop a unique identity your customers will seek out
• Maintain a focus on the customer before, during, and after the sale

Success in retail, service, manufacturing, or any other business always boils down to the customer experience. Beemer and Shook use in-depth interviews with high-level managers from such companies as Chubb, NetJets, Edward Jones, Lexus, Johnson & Johnson, and Four Seasons Hotels to illustrate the best ways for creating exceptional customer service. The Customer Rules gives you the tools you'll need to become the undisputed leader in your industry.

• Language: English
• Publisher: McGraw-Hill Education
• Release date: Sep 7, 2008
• ISBN: 9780071603669

Book preview

customers.

Introduction

As founder and CEO of America’s Research Group (ARG), I conduct surveys on consumer and corporate behavior. The objective of my work is to give my clients a clear understanding about their customers, and in turn, provide them with a competitive advantage. You would think that business owners and managers already know all about their customers. They don’t. If they did, there would be no reason for ARG to exist.

Over the 29 years since I started my company, I have conducted research for industry leaders such as General Electric, JCPenney, Sealy, Kohl’s, and Warren Buffett’s Berkshire Hathaway companies. I’ve observed one common denominator that is shared by these and other successful companies: their quest to serve their customers. They are never satisfied with the status quo. Everything they do evolves around the customer. They do it with zest and gusto. I have seen many marketing strategies throughout my career. So many, in fact, that it’s as if there is an ongoing flavor of the month. But as far as my coauthor and I are concerned, unless the customer is the focal point of all its activities, a company is headed in the wrong direction.

In today’s highly competitive marketplace, it’s easy to be sidetracked and lose focus on one’s customers. There are many distractions. For example, sales volume rapidly increases and the distribution department is unable to get merchandise out the door in a timely manner; or too little volume forces retailers to immediately cut prices to move the goods. We’ve witnessed executives who get so hung up with return on investment (ROI) that they start making their customers jump through hoops to return a purchase. We’ve seen managers become so wrapped up in information technology (IT) that they forget that its main purpose is to better serve the customer. Some managers are so influenced by their corporate law department that all their business decisions are based on legal ramifications. In other cases, companies invest so heavily in elaborate distribution and warehousing facilities that they lose sight that these facilities exist for the benefit of the customer.

We do not deny the importance of all parts of a business—each unit contributes to the overall success of the company. However, we do emphasize that all of these are tools to serve the customer. And when the customer is no longer the center of attention, it should serve as a red flag to management that the business is losing focus. As the adage goes: "As you ramble on through life, whatever be your goal, keep your eye upon the donut, and not upon the hole." We elaborate in Chapter 1 that marketing is the responsibility not only of those employees in the marketing department. Everyone should be constantly thinking about the customer—the CEO, the people in the accounting department, the people in the warehouse—everyone. In order for a company to be a market leader, all employees must work in unison with a common goal to serve the customer.

To research this book, we visited the management of companies that were industry leaders and known to be customer-focused. For example, one of these companies exemplifying excellence in serving its customers is the Four Seasons Hotels and Resorts. According to such authoritative sources as Zagat, Condé Nast, Mobil Travel Guide, and Travel & Leisure, no other company in the lodging industry has received as much unprecedented recognition and accolades worldwide. While Four Seasons properties are palatial and provide lavish accommodations, it is the company’s extraordinary service reputation that earns rave reviews. The graveyard of luxury hotels is filled with extravaganzas that were riddled with high vacancies. It wasn’t that they didn’t have high occupancy rates when they first opened. Their downfall was that customers didn’t come back.

The Four Seasons competitive advantage is not its physical assets but its people who are trained to take a personal interest in making sure that each guest’s stay far exceeds his or her expectations. Four Seasons employees do it in a way that seems as natural and effortless as a gracious hostess who makes a houseguest feel like a member of the family. However, there is nothing effortless about it; an enormous amount of effort is required. The kind of hospitality that is extended to Four Seasons guests by more than 30,000 employees in 73 locations around the world is a result of diligent management. During our research, we talked to founder, chairman, and CEO Isadore Sharp and other senior managers to find out how Four Seasons is able to instill a strong sense of pride in its people who seem to thrive on going beyond the call of duty to satisfy customers. What we discovered, we are happy to report, can be emulated by other companies when their management teams make a commitment to excel in customer satisfaction.

In all businesses, this effort has to start at the top. The CEO must be totally customer focused, and only then will this way of thinking permeate through the organization. All too often, however, CEOs give themselves credit for being in touch with their customers when, in fact, they are not. We spent a day accompanying a CEO of a large regional department store while he made his rounds visiting five locations, a mission that he boasted he repeats semiannually. We walked side by side with his entourage of eight senior managers while he stopped to personally chat with customers.

In one store, the CEO stopped a robust, grandmotherly shopper who was pushing a sparsely filled shopping cart through the women’s lingerie department. He introduced himself as the company’s CEO and chairman. Along with his managers, we crowded around the woman and the CEO questioned her about the store.

What do you think about our selection?

It looks fine to me, she replied.

Are you able to find what you’re looking for?

No problem, sir.

Do you think our store is well lighted?

Yes sir. I can see fine.

Do you think we have an attractive store?

Yes sir, she said.

Do you have any suggestions for improvements or any complaints?

Off the top of my head, I can’t think of anything.

Thank you for taking your time to talk to me.

You’re welcome.

One of the managers handed the woman a $10 discount coupon for any purchase made over $20 that day. This is a token of our appreciation for your speaking with our CEO, he said. He, too, thanked her for her business.

The CEO walked away, his face beaming, and his team nodded in unison, agreeing with their leader. This procedure was repeated with several other customers, and then we and his entourage got into two limousines parked at the store’s entrance and headed to another store. At the end of the day, the CEO boasted that he was not one to sit in an ivory tower, far removed from the action. It feels good to get away from the office and mingle with customers, he said. Being one on one with customers invigorates me. It enables me to feel the pulse of our business. I know what my customers want.

In truth, he had no idea what they wanted. Imagine yourself, dressed in your sweats in the middle of the afternoon on your day off, pushing your shopping cart and suddenly, out of nowhere, you’re surrounded by a team of executives dressed in dark suits. Then an overbearing CEO starts drilling you with questions. Intimidating, isn’t it? What are you going to say when he asks your opinion? In your mind, you’d be thinking, I’ll tell him what he wants to hear and I’m out of here. The last thing you want to do on your day off is have a confrontation with a group of executives.

Yes sir, you would say, I love your store. But inside, you’d be thinking, This is the last time I’ll ever set foot in this box.

Even more potentially harmful to his company than being out of touch with the customer is this CEO’s belief that he is in touch when he clearly is not. It’s not enough to get information on your customer; what matters is getting the right information and being able to objectively interpret it. Everyone already knows that it’s a good thing for business owners and managers to listen to their customers. But if you get inadequate feedback and misread it, it will do a lot of damage.

The CEO cited above is an example of how misinformation can lead to misfortune. In this particular case, his stores looked worn and needed to be updated. Their appearances went downhill over a period of time, but they did so gradually, so that management had not noticed. With sales on a downward spiral, the CEO did not want to invest money in upgrading his stores. So when customers told him that the stores looked okay to them, he believed it. It’s like being a guest in someone’s home and being asked, What do you think about our newly redecorated living room? Are you going to say what’s on your mind: It reminds me of a bordello. Or will you tactfully reply to your host, It’s really you, and I hope you receive many years of pleasure from it.

We take the position that being in touch with one’s customers is a good starting point, but just that—a starting point. But what good is it if one doesn’t glean meaningful information to gain a competitive advantage? ARG research discloses that large corporations tend to gather vast volumes of extraneous data on their customers. And while small companies may develop one-on-one relationships with customers, they lack the ability to collect and process useful information. Nearly everyone in business has taken the equivalent of Marketing 101, but most are unable to formulate a valid interpretation of what their customers are thinking. The failure to properly analyze data can cause as much damage as if nothing had been done.

While we start out sharing the philosophy that every business must be focused on the customer, it is not our intention to rehash old material. To set this book apart from the glut of garden-variety marketing books that have been published, ARG conducted consumer research in excess of $300,000 exclusively for this book, a first in trade book publishing history. This research appears throughout the book and provides current information on what consumers are thinking. Concurrently, we conducted interviews with CEOs and senior managers at companies that score exceptionally high marks in customer satisfaction. Each company that we feature is the leader in its industry for customer service. To collect this information, we visited the world headquarters of marquee companies such as Four Seasons, Chubb, Lexus, and Johnson & Johnson. This book is not based on theory. It is filled with solid data and information about what’s happening in today’s marketplace.

Not all of the companies we visited are multi-billion-dollar corporations with recognizable brand names. We also interviewed management at smaller companies. One was World Wide Technology (WWT), the largest African American–owned company in the United States. Founder and chairman David Steward, a man of faith, built his company based on biblical principles. Paraphrasing the Bible, Steward told us: Our mission is to serve our employees and our customers. If we do this, we will succeed. We are here for each other. Steward believes that individual values should not be separated from corporate values, and this is evidenced in the way WWT does business. Steward’s philosophy works and serves as a model for others. Founded in 1990, this St. Louis–based company had revenues in excess of $2.4 billion in 2007.

A small company that we fell in love with is Tom James Clothiers, a firm that specializes in selling tailor-made clothing. Everything this company does is totally focused on serving customers. Each member of its 600-plus sales force makes personal calls to the customer’s office, and presenting his or her wares with swatches, offers an enormous selection of suits, sports jackets, slacks, and other garments in a wide assortment of beautiful fabrics that come in solids, stripes, and plaids in many colors. All in all, there is an endless combination of styles that can be custom-designed to match the customer’s taste. The total number of items in the Tom James inventory vastly exceeds what a retailer might have in stock. The company’s reps are expertly trained and considerably more knowledgeable than clothing salespeople in retail stores—that is, if you can even find one. If you have visited a department store lately, you have probably noticed that the number of salespeople on the floor has been substantially reduced. What we find so appealing about Tom James is the time that their customers are able to save by not having to shop at a retail store. This unusual company has found a way for the mountain to go to Muhammad.

Every chapter provides consumer surveys, and most importantly, explains what it all means. ARG has been doing these studies for 29 years, and, having talked to several million consumers, we have come up with objective analyses not only of what they say but of what they are thinking.

Sometimes not only do you have to get out there and talk to consumers, you have to come up with ways to really see them in a new light. Moen, the manufacturer of faucets and fixtures, did exactly that when they developed a new line of showerheads for the home. To find out more about their customers, they decided to go right into the showers and observe them in action. Surprisingly, it was not hard to recruit people to take showers in the privacy of their homes, with cameras located in the shower as well as the bathroom doorway, and be filmed from start to finish. This up-close-and-personal technique generated all sorts of revealing insights. Researchers discovered that people spent half of their time in the shower with their eyes closed, that they spent 30% of their time avoiding water, and that, because of poor shower design, they often risked slipping or otherwise being hurt. These and other findings shaped the design of Moen’s Revolution showerhead, which became a bestseller. This unique research demonstrates that if you want to come up with a new product, one that differs from the competition, you have to see your customers in a new light. And what you see depends on how and where you look.

We structured each chapter to provide current research that reveals what consumers are thinking, and most importantly, what they want. This information is followed by examples about execution by the best companies that are the leaders in their industry in customer satisfaction. How high is their level of customer satisfaction? It is so high that they have raised the bar to another stratosphere. During our extensive interviews, a comment we heard on several occasions was, "A satisfied customer is not good enough. We want a delighted customer."

You may have a tendency to think that the costs of this high level of service will be a heavy drain on profits; on the contrary, your earnings will increase because, over time, your company will enjoy more revenues via repeat business and increased orders. Highly loyal customers will also refer business your way. This will result in lower customer acquisition costs and a healthy bottom line.

1

Everyone’s Job

It’s a simple premise. Everyone in the workplace has the same job—serving the customer. The sad thing is that many employees, and even their managers, don’t understand it. Of course, if managers don’t get it, their subordinates probably won’t.

America’s Research Group (ARG) conducted a survey in 2008 that asked, Have you ever considered the notion that everyone has a job at your company that involves the customer? We find it astonishing that four out of ten working Americans think that neither their nor their coworkers’ jobs have anything to do with customers.

Sticking to the same theme, the survey dug deeper. Employees were asked, Does your supervisor talk to you about how your personal efforts affect the customer? Of those who responded, 51.5% answered No. This is a sad commentary on the management of the American workforce.

To get more employees thinking about customers during their workday, it would help if management arranged some conversations between the two. Hearing customers’ needs and problems firsthand might allow employees to rethink their jobs. But mostly, this is not happening. In fact, 46% said that they never talked to customers.

Making the Transition

Typically a business owner starts out caring for customers. Running a one-person operation, the owner is devoted to making sales calls, realizing that the best use of his or her time is being in front of customers. This is what generates revenues. Yes, the owner sweeps the floor, takes out the trash, and does the bookkeeping and inventorying—and does these chores in the evenings and on weekends when he or she can’t call on customers. Hard-driven entrepreneurs don’t need to take Marketing 101 to understand that the customer comes first.

When businesses grow, the owners must assume managerial responsibilities that make demands of their time and take them away from their customers. Some customers feel neglected. They complain that they miss the personal attention they used to receive. It is often difficult for a small business owner to make the transition to run a larger organization. It requires different skills. Hence, the single-minded focus on the customer, once the owner’s strong suit, becomes less of a customer-winning advantage.

Often the newly hired staff has little or no contact with customers. While the business owner and sales force continue to make sales calls, others in the company are isolated from the customer. They have never been taught that their work too is customer related.

The owners who are able to make a successful transition from small to large are those who emphasize to their employees that the customer is the reason for the company’s existence. These entrepreneurs have learned that taking exceptional care of the customer generates repeat orders. And most satisfied customers are the best source of referrals that generate still more business. Spending a good amount of their time in the field, these owners maintain firsthand knowledge of their customers’ whims and needs. Their dedication to serving customers can become deeply ingrained in their company’s culture, spreading into the consciousness and working habits of its employees. In a well-managed company, no matter its size, the sole proprietor’s job, catering to the customers, becomes everyone’s job.

To see how this works firsthand, visit a Four Seasons hotel and ask an employee where the coffee shop is. Ask a housekeeper, bellhop, or even a maintenance worker who’s on a ladder changing a lightbulb. If the maintenance worker is asked, it’s likely that he’ll climb down and give you a friendly greeting. But he will not give you directions. He’ll do better. He’ll escort you to the coffee shop. Just come with me, he’ll politely say.

Why does he do it? you may ask. Isn’t his job to do maintenance and fix broken things? Of course that’s his job. But like all other Four Seasons employees, he knows that serving customers is his main job.

In many hotels, it’s uncommon that a room attendant even says hello to a guest. That’s because she’s been trained to clean rooms. That’s her job. A Four Seasons room attendant knows better. She’s been trained to know that her job is to serve customers, and this obligation includes extending hospitality in the form of a warm greeting to guests.

Serving Others

The people at the companies we visited are driven by a desire to serve others. These women and men go to work every day with a desire to do good for their customers, employees, and communities. So where does such an attitude start? Our research has shown that the founder first aspired to these lofty goals.

David Steward is the chairman of World Wide Technology (WWT), a company he founded in 1990 with an initial investment of $250,000. Headquartered in St. Louis, WWT is now the largest African American–owned business in the United States, with sales in excess of $2.4 billion. A man of faith, Steward set out to run a company based on teachings from the Bible. He says that, like Jesus, his mission is to serve others.

My serving starts with the 1,200-plus people associated with my company, Steward explains. This means I must place the needs of our employees above my own. I am here to help them succeed. Consequently, a high percentage of my time and energy is spent coaching, advising, and supporting our people.

Steward disagrees with managers who believe their chiefdom entitles them to be served by subordinates. They think that because they’ve worked their way up and have a corner office, they’ve earned the right to sit back and savor the perks they believe come with the job, he points out. " ‘I’ve paid the price,’ they say. ‘Now it’s my turn to get what’s due me.’ They think their role in management is to be served. It’s the other way around. It’s a sign of trouble when a company has senior managers who expect to be placed on a pedestal while obedient subordinates scramble to serve them. Good leaders understand that their role is to serve their people. Serving others is not only the best way to get to the top, it’s the best way to stay there. Once you’ve been promoted up the corporate ladder, your avenues to serve others are multiplied.

My number one priority as chairman is to serve my people, Steward maintains. If I am able to do this, it will permeate the organization and carry over to the customer. We believe that when this happens, our company will succeed.

World Wide Technology employees are reminded of their role in serving customers every time they receive a paycheck. On the check, the message is inscribed, A satisfied customer made this check possible.

Harrah’s, founded in Reno in 1936 by Bill Harrah, is one of the oldest casinos in Nevada. Today, it is known as Caesars Entertainment and is the largest gaming company in the world. Other well-known casinos that were once landmarks such as the Desert Inn, the Dunes, El Rancho, and the Sands are long gone. Harrah’s survival and success are due in part to the high regard its people have for the customer. Its customer-focused policies trace back to Harrah himself, a man who, unlike David Steward, spent little time in church. Still, he too cared about treating customers well. Harrah is once known to have said to one of his senior officers, I want you to understand this. The bottom line is the most important thing to most corporations. I still own 70% of this company, and the bottom line isn’t that important to me. I do want shareholders to appreciate and join in our profits, but the three things I want done are: I want the customer treated properly; I want the employees treated properly (if we do that, we won’t have to worry about the unions); and I want the place maintained and clean at all times. If we make money after that, fine. That’s my philosophy.

Starting with his early days, Harrah put a system in place whereby each employee was rated especially for the attention he or she gave to pleasing the customer but without hurting the business. A perfectionist, Harrah constantly emphasized paying attention to the details. It was a big deal if a lightbulb was out; you had to change it. Adhesive tape was forbidden in public areas at Harrah’s—no memos, licenses, or notes could be taped anywhere. He was a nut for cleanliness, one long-time employee said. You couldn’t have an ashtray on a table for five or ten minutes before somebody came by, emptied it, washed it, and put it back. You couldn’t have cigarette butts or stuff like that on the floor for a few minutes before some guy came around and swept it up. The keno girls and all the girls that wore the short skirts, they’d better have their seams straight on their stockings or they were in trouble. When you went to work, you wore black slacks, a white shirt, and a tie, and your pants had to be pressed. You walked on the floor and you’d better be in good shape or you weren’t going to be on the floor for very long. You were going to be sent home.

When he built his first casino-hotel, the Lake Tahoe property, it was the world’s first hotel with two bathrooms in every room. I want to have two bathrooms so that when a gentleman and his wife are in the room, he can use one bathroom and get ready for dinner, and she can use her bathroom. Where did he get the idea? He said that it was what he would have personally wanted if he were a guest. Harrah died in 1978, but his emphasis on taking superlative care of his customers became his legacy. Thirty years after his death, his insistence on great customer service is still mandatory in the casinos that bear his name.

Put It in the Job Description

Don’t keep it a secret. Spell out in every employee’s job description how the job relates to the customer. This way, starting on day one, every employee knows that serving the customer is the company’s top priority.

To our dismay, however, a survey conducted by ARG revealed that only 59.2% of all working Americans have a written job description. And yes, if a job description isn’t in writing, it’s not worth the paper it’s written on! This research tells us that American industry is allowing 40% of its workforce to work as free agents.

At those companies where management has communicated to the workforce that everyone’s job is customer related, there is a vast difference in the level of service. However, it’s not the employees’ fault when they don’t know their job is to serve customers if nobody has ever told them that it is their first priority. It cannot be assumed that someone in the accounting or legal department would consider his or her job to be to take care of customers. It’s not something taught in an accounting or law class. Unless it’s specifically spelled out, people think that it’s the marketing and salespeople’s job—they are the ones who are on the firing line and in direct contact with customers. So in order to make it perfectly clear, it must be put in the job description. Let everyone see it in writing—at his or her time of employment.

Guiding Principles and Beliefs

Great companies have certain guiding principles and beliefs, or a mission statement that plays an everyday role in how people conduct their daily business. The best we’ve come across is Johnson & Johnson’s. Founded in 1887, its credo was created in 1943 by CEO and chairman Robert Wood Johnson, the son of one of the cofounders. Introduced the year before the company became publicly traded, the document has been revised several times in accordance with Johnson’s belief that it should evolve with the language as well as with the growth and development of the company. Here’s the current version:

Our Credo

We believe our first responsibility is to the doctors, nurses and patients,

to mothers and fathers and all others who use our products and services.

In meeting their needs everything we do must be of high quality.

We must constantly strive to reduce our costs

in order to maintain reasonable prices.

Customers’ orders must be serviced promptly and accurately.

Our suppliers and distributors must have an opportunity

to make a fair profit.

We are responsible to our employees,

the men and women who work with us throughout the world.

Everyone must be considered as an individual.

We must respect their dignity and recognize their merit.

They must have a sense of security in their jobs.

Compensation must be fair and adequate,

and working conditions clean, orderly and safe.

We must be mindful of ways to help our employees fulfill

their family responsibilities.

Employees must feel free to make suggestions and complaints.

There must be equal opportunity for employment, development

and advancement for those qualified.

We must provide competent management,

and their actions must be just and ethical.

We are responsible to the communities in which we live and work

and to the world community as well.

We must be good citizens—support good works and charities

and bear our fair share of taxes.

We must encourage civic improvements and better health and education.

We must maintain in good order

the property we are privileged to use,

protecting the environment and natural resources.

Our final responsibility is to our stockholders.

Business must make a sound profit.

We must experiment with new ideas.

Research must be carried on, innovative programs developed

and mistakes paid for.

New equipment must be purchased, new facilities provided

and new products launched.

Reserves must be created to provide for adverse times.

When we operate according to these principles,

the stockholders should realize a fair return.

This credo is cast in stone at Johnson & Johnson. Literally. As soon as you walk into the company’s world headquarters in New Brunswick, New Jersey, you’ll see this credo engraved in the limestone wall. The letters that spell Our Credo are 2¼ inches high; and underneath, the size of each individual letter is slightly larger than one inch. It’s big and bold enough that you don’t need your glasses to read it. The engraving makes it clear to employees and visitors that the credo is taken very seriously at Johnson & Johnson. The company goes much further than casting it in stone. To make sure that it’s being adhered to, the company conducts annual surveys with its employees around the world addressing the important question: How do you rate the company against the Credo? So far, employees report that they and their coworkers follow it, and it plays a role in the decision making on day-to-day activities as well as major long-term plans.

There’s still more to tell about the Johnson & Johnson credo. When we first sat down to interview the company’s CEO, Bill Weldon, he immediately started off the conversation talking about the company’s credo. Weldon spoke with passion, and in regards to the credo, he repeated the various responsibilities that the company has. It’s about treating people with dignity and respect, he emphasized. "Even if it means the company is reducing its workforce and has to let somebody go. You still treat them properly.

We spend a lot of time making sure our employees have good working conditions, Weldon said. But it goes beyond the employee; it’s also about the employee’s family, which includes paying good wages and good health benefits so they live well. This reflects the business we’re in, which is providing products and services to people around the world that enhance their lives. The people who work here understand this, and they feel good about the commitment that we have to others as well as our commitment to them. The two feed off each other. This is why we talk a lot about our value system, which is embodied in our credo. We are here to do the right thing. That’s a responsibility we have.

Ray Jordan, Johnson & Johnson’s vice president of corporate communications, said that the company conducted some external research in 2007 to find out what people thought about the company. What the study revealed, Jordan says, is that they talked a lot about putting the needs of others first. When I read the report, I said, ‘Wait a minute. That’s the way the credo is written.’ It’s not about what we do but about our responsibility to patients, doctors, and nurses. We also have responsibilities to shareholders. I thought it was an interesting link that people outside the company were echoing what’s reflected in our mission.

Today, having a mission statement is in vogue and most companies have one, but few place as much importance on theirs as does Johnson & Johnson. A 2007 ARG study reveals that only 20.9% of American workers were ever told about the company’s mission statement during a job interview. Knowing this, it comes as no surprise that only 21% of employees are able to recite their company’s mission statement. If a mission statement isn’t important enough to be discussed during a job interview, why should it be expected to be made known after employment? Companies that are truly customer focused could never allow this to happen. They couldn’t tolerate having four out of five of their employees not being united in the quest to achieve the company’s goals.

In the same study, only 47.4% of all working Americans have ever even seen their company’s mission statement. Of those who have, 75.5% of them believe their employer truly adheres to its mission statement. Compare this number to a survey reporting that 98% of all Japanese workers are familiar with their employers’ mission statements. One manager of a major Japanese company was dismayed because 2% of his company’s employees were unfamiliar with its mission statement. To him, 2% was a failing grade. It means we have employees who think we’re not working as a team, he sighed.

While it’s important to have a written credo (mission statement), one company that goes beyond this is Four Seasons, where the unwritten credo of the Golden Rule (to treat others as you would want to be treated) is very much a part of its company culture. Our founder, Isadore Sharp, has abided by the Golden Rule since the company was founded in 1961, says Ellen du Bellay, who is vice president of learning and development of the high-end hotel chain. Mr. Sharp has always advocated treating our guests as we ourselves would want to be treated. Of course, this is what the Golden Rule tells us. Well, we talk about the Golden Rule so much that it is deeply engrained in the Four Seasons culture. Consequently, every employee knows that the Golden Rule should be applied at all times to the way our guests are served. Sure, it’s a 2,000-year-old philosophy, but as far as we’re concerned, it still works.

Edward Jones: A Business Model Built on Customer Relationships

Edward Jones, the financial securities firm, has more than 10,000 offices spread across the United States, Canada, and the United Kingdom. Edward Jones far exceeds industry leader Merrill Lynch in terms of total number of offices. Evidently, Edward Jones’ large numbers haven’t hindered its ability to serve customers because, according to J.D. Power and Associates and SmartMoney magazine, it ranks first in customer satisfaction among all full-service financial-service brokerage firms. In 1922 Edward D. Jones Sr. opened his own brokerage firm in downtown St. Louis, Missouri. During its early history, Edward D. Jones & Company operated as a conventional brokerage firm, underwriting stocks and bonds and selling securities to customers. In the 1940s and 1950s, Edward Jones’ investment representatives were known as TNT brokers because they traveled the countryside surrounding St. Louis from Tuesday until Thursday drumming up business.

It wasn’t until 1955 when the founder’s son Edward D. Jones Jr. (Ted) opened the firm’s first branch office. Located in Mexico, Missouri (population 12,200), it became the prototype for other branch offices that were to pop up all over the Midwest. Ted who took over as managing partner in 1968 recognized an opportunity to focus on investors in small towns and farm communities that had been overlooked by the major firms. By meeting face-to-face with clients, building strong relationships, and by offering a conservative investment philosophy that focused on investing in blue-chip stocks and bonds, Ted believed his company would find a niche in the marketplace that would differentiate the firm from the competition.

In 1963, Edward Jones had 67 offices when John Bachmann, a 23-year-old man fresh out of college with an MBA, came aboard. Bachmann had worked part-time at Edward Jones for the past three years running messages, and when needed, he cleaned the basement and carried out the trash. As a full-time employee, Bachmann started out in a staff position but quickly realized that to get ahead in this business, I would have to succeed in the sales side. I had to go out and meet the public. So after spending one year at the home office, the young man moved to Columbia, Missouri, and during the next seven years built a thriving one-man brokerage office. He then returned to company headquarters as a principal in the firm with responsibility for fixed-income product marketing. After several promotions, Ted Jones announced that Bachmann would succeed him as managing partner. At the time, Edward Jones had about 300 branch offices in 28 states. Following his predecessor’s philosophy of serving serious long-term investors through one financial advisor offices, Bachmann introduced technology and training programs that spurred tremendous growth during his tenure. When he stepped down as managing partner to become a senior partner in 2003, under his guidance, Edward Jones had more than 9,000 offices.

Edward Jones’ current head honcho is Jim Weddle, who, like Bachmann, started in the trenches. After graduating DePauw University in 1975, the psychology major with a minor in business turned down a position at Procter & Gamble to pursue an MBA at Washington University in St. Louis. His first contact with the firm was during a career day when he heard an Edward Jones representative speak about a part-time opening in the company’s research department. I put on the one suit I owned and went in for an interview, Weddle recalls. "When I handed my résumé to the director of research, he frowned and commented that I was attending a good graduate school but my undergraduate degree wasn’t satisfactory. I was totally decimated, but quickly became suspicious and said, ‘You must be from Wabash.’

The man was John Bachmann, and he burst out laughing. He was a Wabash graduate, and a football rivalry between the two schools has been going on for about 100 years and at the time, the two schools were tied at 50–50. We kidded each other and by the end of the afternoon, he offered me a job and I started the next day.

Weddle worked in the research department while earning his MBA, and during this time, he regularly spoke to Edward Jones financial advisors. I really enjoyed the industry, Weddle explains. It was dynamic and fast-changing—it was different every day. By the time I finished graduate school and was ready to start my full-time career at Edward Jones, I concluded that I wasn’t going to be a very good research analyst. I was enamored with the sales end of the business and realized I was on the wrong side of the phone. I wanted to be a financial advisor. So, as soon as I graduated I took the company’s training program, sat for the Series 7 examination, and I was ready to go out and open a one-man branch office.

Weddle had grown up in Naperville, Illinois, a suburb of Chicago, and his wife Stacey was a native of Indianapolis. On weekends during his training program, the young married couple routinely packed their suitcase and drove through Illinois and Indiana in search of a small town that did not have an Edward Jones office. We were looking for a place where we could settle down and call home, Weddle tells. We’d visit the Chamber of Commerce, stop at the local mom and pop restaurants, and ask the locals a lot of questions about the town. We’d go into the pharmacy or hardware store and question people, ‘Tell me why you think this town is so special?’ On our fifth weekend, we stopped in Connersville, Indiana, a town 60 miles due east of Indianapolis with a population of 25,000. The town was the county seat, and its economy had a good mix of agriculture and business. Ford, Percolator, Dresser Industries, and Stant Manufacturing were the area’s big employers. Stacey and I thought the town had a lot of charm, especially its courthouse square and the local businesses that surrounded it. We immediately knew that it was where we wanted to live.

Weddle was 23 years old when he opened the firm’s two hundredth office. With the company’s backing, he opened a one-person office, typical of nearly all Edward Jones brokers’ offices. And like the firm’s other branches, the firm helped him hire a branch office administrator (BOA) who would serve as his assistant. On day one, Weddle started introducing himself to prospective clients, making door-to-door visits, and getting involved in the local community meeting people. He did what other Edward Jones financial advisors were taught to do before him, and what thousands of others have since been trained to do. Today with more than 10,000 one-person offices strategically placed in strip shopping centers, small-town main streets, and suburban areas of large cities, Edward Jones blends in with the local community like a friendly neighbor. Edward Jones offices are everywhere, and today people recognize the name. They’re next to the dry cleaners, the ice cream shop, and the beauty parlor. These 1,000-square-foot offices are informal and cozy. Clients feel comfortable about stopping in after work, even dropping by wearing bib overalls and work boots. And like Jim Weddle did for seven years in Connersville, today’s Edward Jones advisors are just as apt to stop in at their clients’ homes to review investment portfolios.

Having started their careers in the trenches, both Bachmann and Weddle had firsthand experience in working