CUSTOMERS NEED COMMITMENT, URGES RETAILER

ROSEANNE HARPER

MINNEAPOLIS -- The No. 1 priority at Stew Leonard's is satisfying the customer -- no overcooked turkeys, no reluctant employees, no indifference on anybody's part.

Ever since its beginnings as a small dairy store, the three-unit independent retailer, based in Danbury, Conn., has curried customer loyalty. In fact, a huge rock at the entrance to each of the stores is inscribed with this message: "Rule #1: The customer is always right. Rule #2: If the customer is wrong, reread Rule #1."

Lots of retailers intone the sentiment on that rock but Tom Leonard, company president, underscored how serious he and other family members are when it comes to enforcing it. Empowering employees to do right by the customer is one of the main reasons 300,000 people visit the three stores every week, he said.

"We tell them they'll never get yelled at for making a customer happy," Leonard explained, during a seminar at the annual convention of the International Dairy-Deli-Bakery Association.

Stew Leonard's has long been known for its whimsical decor, including animated dancing chickens and singing milk cartons, a barnyard with real animals, a country-western band on weekends and daily demoing throughout the store. But underneath it all is a customer-specific strategy that keeps people coming back long after the novelty of the store itself has worn off.

Leonard related an incident in which a customer had forgotten her wallet and was about to leave her purchases on the checkout counter when the cashier said, "It's alright. You can come back and pay me tomorrow."

The customer found it hard to believe the cashier had the power.

"The manager was summoned and he quickly said it was fine. The customer was amazed, and pleased. We definitely had won her as a customer for life," Leonard said.

As he flashed a slide of a turkey carcass on the screen, Leonard recounted another customer who returned an overcooked turkey without much meat left on it and said she wanted her money back because the turkey meat was dry. The department manager gave her money back and apologized.

"That turkey wasn't dry. She had cooked it too long, but it didn't matter. The customer's perception was that it was dry and the important thing was to make her happy. It's no secret that it costs five times as much to attract a new customer as it does to make a current one happy. So what's a turkey? It would have cost us five turkeys to get a new customer to replace her," Leonard said.

But such dedication to the customer can only be executed if employees are appreciated, empowered and happy, he added.

"The ultimate goal is to satisfy the customer, but it's teamwork that gets it done."

Leonard described one way Stew Leonard's recognizes its associates for work well done.

"We have an ABCD shirt. The ABCD stands for 'Above and Beyond the Call of Duty.' [Associates] can wear the shirts to work if they want to," Leonard said, noting it stimulates more interaction with customers because people ask what they did to get the shirt.

Recognition is valued very highly by employees in general, studies have shown, and Stew Leonard's takes its employees, as well as its customers, seriously, Leonard said.

"It's not the recruiting, but the retaining [of associates], that makes the difference," Leonard said, explaining that if you want a happy customer you need to have happy employees. They, as well as customers, are listened to, he said.

That's how the idea for using pretzel sticks instead of toothpicks for demoing cubes of cheese at Stew Leonard's was born, Leonard said.

"The idea was to eliminate customers' dropping the toothpicks on the floor. They can eat the pretzels and there's no clean-up of toothpicks necessary. That idea came from one of our people."

Managers and associates respond quickly, too, to customers' suggestions, Leonard said.

"We have a suggestion box like a lot of people do, but what's different at Stew's is that box is emptied every night. At 8 a.m. that box is empty. The suggestions of the day before have been typed up and copies are on managers' desks and on the [staff] cafeteria tables that morning," Leonard said.

The secret to having a lot of customers is to respond to them -- quickly, he said.

"When customers see the suggestion box is emptied every day, they know we take them seriously. They can see [the box] isn't just a gesture. And we do get about 100 suggestions a day."

Leonard pointed out that many of the best and workable ideas that Stew Leonard's gets come from customers.

"We received this picture from one of our customers," he said, showing a slide of the customer in front of a building in Russia. She was holding a plastic bag with the Stew Leonard's logo on it.

Tom Leonard said his father tacked it up on the bulletin board in the Danbury store. It generated so much comment that Stew Leonard's announced it would put other customers' photos on the board if they would take them when they're on vacation or visiting other places. The only prerequisite: a Stew Leonard's bag had to be prominent in the photo.

"Now the bulletin board is filled from top to bottom with such pictures. And we give the customers a $3 gift certificate to pay for the film they used," Leonard said.