EXECUTIVES STRESS ATTITUDE IN CUSTOMER-SERVICE LESSON

GREG GATTUSO

BALTIMORE -- It's not enough for supermarket companies to say they care about customer service -- owners and operators must set the tone within their organizations.

Top executives from King Soopers, Supervalu, Superquinn and Fleming Cos. stressed the importance of customer service in separate presentations made here at the second annual Supermarket College conference.

"If you're a manager or an owner, your attitude is infectious throughout the company," said Don Gallegos, chairman of the executive committee at King Soopers, Denver. "Service is an attitude issue. When you create that climate, then your people will provide it."

King Soopers' policy is "give the customer what he wants -- no questions asked," Gallegos said. "People don't know good service until they get it, and when they get it, they'll switch [stores]. They'll do it on a dime."

Gallegos said the company receives 1,800 to 2,000 customer comment cards per week. Every customer who writes gets a phone call from a store manager, who, in the case of a negative comment, is expected to take appropriate action.

All such actions are reviewed by one of the top three King Soopers executives, to make sure the matter was handled satisfactorily. About one in 10 cases is sent back to the store manager to be improved upon, Gallegos said.

"The customer is not always right, but he is always the customer," Gallegos added. "The customer is not going to change, but [the retailer] is going to change or the customer is going to go to another store."

When King Soopers noticed it had a problem with unreturned movie rentals, it advertised a "video amnesty" period, in which customers could return tapes without paying a late fee. That week the company received 800 overdue tapes, and created goodwill by absolving customers of their late fees.

"We don't make money on late fees," Gallegos said. "We make money renting videos. If they bring back the videos, then we can rent them."

Gallegos cautioned retailers against writing off demanding customers as "jerks" because they still spend money in supermarkets.

"You don't judge people -- you help them," he said. "When you create that climate you can't lose."

George Chirtea, vice president of merchandising for Minneapolis-based Supervalu, said supermarkets can take a tip from McDonald's and Wal-Mart when trying to create a more customer-friendly shopping environment.

The McDonald's experience goes beyond food, Chirtea said, to include playlands, gifts, prizes and clowns; Wal-Mart succeeds by making every employee a greeter, he said. Chirtea said by providing outstanding customer service and by merchandising foods that are convenient, fun and exciting, supermarket operators can make customers "ashamed" to buy fast food or shop competitors.

Service is what keeps Dublin-based Superquinn, a 16-store chain, competitive with larger chains, both Irish and international, said Feargal Quinn, the company's owner and managing director.

"Small is beautiful," Quinn said. "There are some things that small shops can do that the big fellows can't."

Quinn said some of his ideas have been met with resistance from inside the company. Concepts such as supervised playrooms for children, candy-free aisles and hiring a full-time nutritionist were viewed by some as too costly. However, Quinn said, the chief executive officer must set the tone for the company by making the stores customer-friendly.

"If we can get our guests to come back over and over again, then we'll be more successful than if we just sell something," Quinn said. "Everything we do is based on getting the customer to come back to us. I call this 'the boomerang principle,' because it gets people to come back."

Quinn said giving incentives for higher sales only encouraged managers to "take shortcuts in the interest of profits." Now, he said, bonuses at Superquinn are awarded for holding on to the top 40% of customers -- loyalty-card holders whose purchases are tracked -- year after year.

"If loyalty doesn't get measured, it doesn't get attention. I say, if we can find a way to measure the benefits of loyalty, then we can find a way to succeed," Quinn said. "We look at our store records and see if we managed to hold on to 2,000 of our top 2,200 customers. If we did, then we've done our job."

Mark Harsha, director of advertising for Fleming Cos., Oklahoma City, said learning about consumers is the only true way to satisfy their shopping needs.

"Listen to your customers and to all consumers in your marketplace," Harsha said. "The consumer is king and should be treated accordingly."