Customer service reigns supreme at Stew Leonard's, a micro-chain of fresh-food stores within a stone's throw of New York City in suburban and exurban New York and Connecticut. Operating in a realm where the customer is right even when she's wrong, this third-generation family business has blossomed from a small dairy store founded in 1969 that carried just eight items and had seven employees into a four-store operation carrying 2,000 items with annual sales of $400 million, nearly 2,000 employees and a ten-year run on Fortune's "100 Best Companies to Work for in America," a who's who of employee-centric businesses.
The stores themselves are equal parts spectator sport and foodie delight, a carefully calculated labyrinth of aisles and switchbacks designed to funnel shoppers past a cornucopia of fresh baked goods, produce, meats and fish, dairy products, deli foods, freshly prepared food, and food sampling stations.
With their petting zoos, characters costumed as barnyard animals and whimsical animatronics displays, an environment that prompted The New York Times to dub it the "Disneyland of Dairy Stores," Stew Leonard's do not lend itself to hit-and-run shopping.
"It's like Whole Foods without the attitude," said one longtime customer, who confessed to a $100-a-week Stew Leonard's habit.
The Golden Rule
Stew Leonard's secret for keeping both customers and employees happy is a monomaniacal adherence to the Golden Rule, Stew Leonard Jr., the company's president and CEO, told BusinessNewsDaily. You have to treat other people the same way you'd like to be treated.
"Our goal is to have customers leave with a big smile on their faces," Leonard said. "People come in the store and they're treated as part of the family. I think that's very important for us. It's a competitive advantage."
Setting that tone begins with the people you hire and how you train them and care for them, he said.
"You can't have a happy customer unless you have happy people," Leonard said. "It really starts there. I'd never ask anyone at the store to do something I wouldn't do or haven't done."
And you have to treat your people well.
Treat your people well
"You've got to pay them well and given them good benefits," Leonard said. "You can't hire great people and try to pay them minimum wage. If I want to get the best people, I have to pay a premium in the market just like I have to pay a premium in the market for really fresh food."
The most critical thing, he believes, is the hiring process. Skills alone are not enough.
"You really have to hire somebody on their attitude," Leonard said. "You have to get them engaged in what you do every day. Ninety percent of our floor managers are hired from within. There are no prima donnas walking around."
Leonard offers the example of a small child who drops his ice cream cone on the floor in one of his stores.
"I can't teach somebody to go over to them and say, 'Oh, I'm so sorry. Let me get you another ice cream cone,'" he said. "You just can't teach that. What I have to do is hire for that. I have to do a really good job picking people."
Customer service
Once they're onboard, you need to train them in the Stew Leonard policy on customer service, which is chiseled on a large rock at the entrance to each store. "RULE # 1: THE CUSTOMER IS ALWAYS RIGHT! RULE #2: IF THE CUSTOMER IS WRONG, SEE RULE #1."
Leonard's father, Stew Leonard Sr., was introduced to that policy the hard way when he was taken to task by his wife for arguing with a customer about a half-gallon of sour eggnog, even though the customer was clearly in the wrong. The result of the way he handled the situation, his wife told him, was that he had lost a customer and possibly many more when the aggrieved customer told her friends and family about the incident.
The policy was literally set in stone the next day when Stew Sr. drove by a monument store where they were unloading granite. He stopped, bought a 6,000-pound slab of granite and had a stonemason chisel the two rules of the new store policy onto the rock. "The rock," as it's called, serves as a touchstone for training new employees about the Stew Leonard way.
Communication and education
"What I struggle with all the time is how you keep this great customer service policy going," Leonard said. "The two most important things are communication and education. Before they can even work on the floor, they have to go through a two-hour orientation. It talks about the rock and about customer service."
It's an unfortunate fact of life that not all customers are created equal, Leonard said.
"You deal with a lot of difficult customers each day," he said. "They're not all nice to you."
But they are decidedly in the minority, he said.
"You really have to focus your customer service philosophy around your good customers," Leonard said.
Lifetime customer value
Leonard preaches lifetime customer value. You need to need to teach your employees the real value of being nice to the customer, he said. The average Stew Leonard's customer spends about $100 a week on average. That's about $5,000 a year.
"If you want them to continue shopping for ten years, that's $50,000," he said. "That's like investing in a piece of equipment."
Stew Leonard's attitude toward customer service had its genesis in the way Leonard's grandfather, Charles Leo Leonard, ran his small home-delivery dairy business in Norwalk, Conn., in the 1920s.
"My grandfather didn't know the difference between a friend and a customer," Leonard said. "My father grew up in his footsteps. When he opened the retail store, he wanted it to be the same. He didn't look at the people coming in as customers; he looked at them more like they were friends or neighbors. They were people he grew up within the community. My brother and sister and I grew up with my mom and dad in the store treating everybody like that. That's the philosophy that was handed down. Treat the customer like a friend or a neighbor; somebody you really want to help out."
You can't fake that kind of attitude, Leonard believes.