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Applying Lessons from The Nordstrom Way to Your Dealership

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“Every transaction, every touchpoint, is an opportunity to create a meaningful moment, an emotional connection that will endure – a relationship.”

Robert Spector

Robert Spector is an optimist. And he is bullish on the automotive industry.

Spector, a recognized authority on customer service excellence and author of the best-selling book, The Nordstrom Way, has been a consultant to numerous Fortune 500 companies over a 30-year career. Work that has given him an “up close and personal” view of how companies in a broad range of industries strive to better serve their customers.

In The Nordstrom Way, Spector outlines the company’s business model and describes the philosophy behind a customer service strategy that has made Nordstrom one of the world’s most wildly-successful retailers.

In 1990, Spector was tasked with writing a simple article about the family-owned luxury retailer for the trade journal Women’s Wear Daily. Spector initially intended to focus specifically on the top salesperson at Nordstrom’s flagship Seattle store, but a publisher learned about the article and contracted him to develop a book about the entire company. Five years later, in 1995, the first edition of The Nordstrom Way was published, becoming a staple in corporate boardrooms as well as on business school campuses.

“A huge aspect of what makes Nordstrom, Nordstrom, is culture” said Spector in a recent telephone interview with DealerRater. “Nordstrom has created a culture that focuses on putting the customer first, and it hires people that buy into that culture. Nordstrom has the right idea and its approach is simple. It’s a customer service strategy that can be used by any business, including automotive dealerships. It’s the execution that’s the challenge.”

Founded in 1901 by John Nordstrom and Carl Wallin, Nordstrom started as a humble shoe store in the Pacific Northwest. Today, the high-end retailer is publicly traded and operates a total of 323 stores in 39 states, with 121 full-line stores in the United States, Canada, and Puerto Rico; 194 Nordstrom Rack stores; two Jeffrey boutiques; and one clearance store. In 1998, Nordstrom began serving customers online with a digital presence that now includes Nordstrom.com, Nordstromrack.com, and HauteLook.com. By 2009, Nordstrom had implemented industry-leading inventory management and order fulfillment capabilities to provide a seamless shopping experience both online and in-store.

Through it all, Nordstrom has remained family run, with a fourth generation of John Nordstrom’s descendants actively managing the company and an entrepreneurial, customer-centric business culture driven by the empowerment of front-line employees.

According to Spector, a company’s level of customer success mirrors the internal tenor and tone the organization fosters and presents to consumers.

“Nordstrom’s growth and industry reputation are a direct result of its ability to maintain a culture that focuses on making life as easy as possible for customers,” he said. “Key to this is providing employees the freedom to do whatever is best for their clients.”

And yet in many industries, Spector believes, retailers often prioritize making things easy for the company ahead of making the shopping experience effortless for customers. In the automotive industry, he says, the key cultural ingredient in driving long-term showroom success is one of trust.

“Dealerships must foster a culture that takes into account the dramatic shift in business transparency that online resources have made possible,” he said.

Spector believes that it is more important than ever for dealers to make visits to their stores a trustworthy experience in which customers feel their purchases are valued and that they will be working with highly-knowledgeable salespeople. 

“It is critical that dealership employees focus completely on the fact that it is the customer signing their paycheck,” he said. “If salespeople change their approach from making a commission to one in which the focus is instead on creating a pleasant and easy purchase experience for a customer, they will likely see more success.”

The advent of Tesla Motors, which seeks to change the traditional car retailing model of third-party distribution to one in which consumers purchase vehicles directly from the manufacturer, represents an opportunity for today’s dealers, concludes Spector.

“Every established industry is going to do whatever it can to hold on to how things have always been and the automotive industry is no exception,” he said. “But it’s an even playing field. Dealerships need to create their own value and cultural model of how they do business so that they will, like Tesla, stand out and customers will buy from them.”

About Robert Spector

In addition to The Nordstrom Way, Spector is the author of The Nordstrom Way to Customer Service Excellence: The Handbook for Becoming the “Nordstrom” of Your Industry; Amazon.com: Get Big Fast; and The Mom and Pop Store: True Stories from the Heart of America. Reach him at http://www.robertspector.com/.