Most of these BIG Box stores operate in a similar fashion. I was talking to an employee at Home Depot yesterday while he was re-keying a lock for me. I commented that as busy as the store was and being Christmas season, I would think they would have more floor employees working as well as more than 3 check out lanes open. He commented that they always operate with as few employees as they can get by, but the Home Depot CEO received a 15 million dollars last year in salary and bonuses. Jack
Home Depot shows up low on the list in customer satisfaction/quality-of-service surveys. Bob Nardelli, the CEO, has decided to "fix" it. How? In the local HD store (don't know if it's nationwide or not), in order to "improve" customer service, each sales clerk is required to sell two HD credit card accounts per day, and two "extended service plans". So if someone buys a power tool and the clerk wants to get "credit" for the sale, the clerk must follow the customer through the store until they get to the cashier's station and fill out the paperwork. Otherwise, the cashier gets credit for it. Meanwhile, if another customer needs help, the one looking for the sale credit is "busy". The local employees here are, for the most part, really good. It's the bone-heads running the company and some of the supervisory staff that are the problem. But how does selling ESPs or credit card accounts "improve" customer service/satisfaction? After all, ESPs are a major source of profit, and if your Maytag appliance fails under the plan, a local independent Maytag dealer is the one called for "service". But if he didn't sell the machine, you go to the bottom of his list (a good friend of mine is the local Maytag dealer, so that's how I know -- he told me).
So I decided to email Nardelli with a suggestion on how to improve the problem. I went to the HD customer web site and filled out an email under "Contact Us". When I clicked on "Send", the HD web server returned an "Illegal Request" error. I'm using the Mozilla Firefox browser which is very popular. I wonder if anyone at HD actually tests their web pages before posting them! It really damages their perceived quality of service when that happens, but how do you contact someone who can't be contacted? This sort of thing continually reminds me of "The Emperor's New Clothes", the fairy tale by Hans Christian Andersen.
There is a locally owned small lumber yard less than a mile from my home. I often find prices are as much as 30% cheaper than at the Depot. I buy there whenever I can. Or I try to deal with wholesalers through my own business instead.
My suggestion to HD on how to improve service was the same I recommend for ALL companies, large or small: Every manager from the CEO down to the store manager should spend one full day every week out on the sales floor talking to *actual customers* so they can understand what the customer sees and needs. This includes big-shot bankers answering the phone or standing in a teller line, retail store executives working at the returned goods station, etc.
These hot-shots sit in their offices with their MBA degrees, having gone to school to learn how to run somebody else's business, sitting in classes taught by professors who have never run a real business, using a text book written by another PhD who's never run a business. I worked at Hewlett-Packard when the co-founders owned 60% of the stock. They treated and rewarded employees (who had obviously made them successful) well. 25% of pre-tax profit went to employees in retirement and profit sharing benefits. When they faded away and Wall Street got
control of the company, it went to the proverbial place in a handbasket in very short order because Wall Street is also run by clueless MBAs who see employees as a liability, not an asset you can't survive without.
Two things amaze me: big companies can turn a profit, and small companies can compete against the technology and massive resources of the big companies. There is so much inefficiency in big outfits that it takes huge gross profit margins to cover the overhead, and that's what seems to balance the equation, competitively speaking.