Check out this great podcast all about Trader Joe's

I was flattered to be asked to contribute to this great podcast, sponsored by Zendesk, on the topic of great customer service. The first episode is, in fact, all about TJ's. Check it out and let me know what you think...

This episode is entitled "Beyond Cookie Butter: The secrets behind Trader Joe's great customer experience.

What Delta Airlines could learn from Trader Joe's

TL;DR

A Delta Airlines flight from Kansas City to Atlanta landed 43 minutes late, leaving us with a very tight connection. After running through the airport, my wife and I found the once-daily flight to Turks & Caicos had left early. Then, the harried and overworked personnel at the 'Need Help' desk made matters worse by failing to display any empathy at all.

In 'Build a Brand Like Trader Joe's' I wrote about Gardiner's Fourth Law of Marketing, which goes, "No one loves you as much as a customer who just hated you." 

What that means is, when a customer's been wronged and has a complaint, as a brand, you have that customer's full attention. By caring, and making things right, a brand can turn a disgruntled customer into a real evangelist.

That's a lesson lost on Delta.

We did ultimately get 'assistance', I suppose. But this sign would be more accurate if it read, "Need Help? Good luck."

We booked a journey from Kansas City to Providenciales, Turks & Caicos. Since our Kansas City flight left at 0600, we took the precaution of booking an airport hotel the previous night. 

Although our flight boarded on time, it took off significantly late after a 20-minute wait for deicing—something that surely should have been anticipated in Kansas City in February.

Very late in the approach to Atlanta—within sight of the runway, long after the gear had gone down, at an altitude that, according to FlightAware must have been less than 500 feet—the pilot waved off the landing. Neither my wife nor I are particularly nervous flyers, but that was a first for me. After a long, long time, we were told that the landing had been aborted due to rain on the runway, and we were “in vectors”. The net result was that we arrived 43 minutes late. That left us less than half an hour before our second flight was scheduled to depart.

One large group flying to a wedding in the Caribbean was told their plane was waiting for them.It would have been very helpful if Delta personnel on the flight could have made an announcement asking people traveling to Atlanta, or with reasonable connections, to let people with tight connections leave the plane first. There was no effort to expedite deplaning for those of us with tight connections.

We ran through the airport, and arrived 8 minutes before scheduled departure, only to find the door to the jetway closed with the jet still there. According to FlightAware, Delta 509 departed early, even thought the crew had to know that there were transferring passengers on the ground. Let that sink in: someone at Delta decided to leave early, while there were passengers running to the gate.

What could we have done, yelled at someone at our arrival gate, to phone ahead to our departure gate? Would they have done so? Earlier that morning in Kansas City, Delta ticketing personnel told us they could not give us a seat assignment for our flight from Atlanta to Providenciales. If we had seat assignments, would they have held the plane? That lack of a seat assignment was certainly not our fault; we’d gone to expense and trouble to ensure we could check in in Kansas City in plenty of time.

Later on, a Delta customer service agent informed us, “They just told us that they weren’t going to hold flights for just two or three people any more,” but is this a reasonable policy when there's only one flight a day?  Note that the door to the jetway was closed and there was no Delta personnel at the gate eight minutes before the one departure for that day. Less than five minutes would have made a difference of 24 hours for two of the passengers.

We watched helplessly while the plane stayed attached to the jetway for several more minutes; my wife ran to the nearest staffed gate, where she was told, “Go to the ‘Need Help’ sign.” Then the jetway moved back off the plane and it left, without us, for Turks & Caicos.

An added layer of irony comes from knowing that Atlanta is Delta's headquarters, and the airport's the airline's biggest hub by far. If Delta can't provide good customer service here, where can it do so? Most of these passengers are in this line because inbound flights were delayed. The implication is that Delta should be able to forecast demand at this desk hours ahead.

We waited at Delta's ‘Need Help’ desk for over an hour, while a total of three customer service agents worked at a counter with a dozen work stations. We didn't have any other flight options, but other people in line did, and some of their options vanished while they waited. There was one customer service phone position, and we overheard someone say that hold times on the phone were over two hours.

At one point, a customer who had just walked away from the Need Help desk turned back to ask one more question, to which customer service employee sternly replied “Ask Delta!” 

“Ask Delta!” said the person who was the face of Delta at that moment.

When we finally got our turn, a harried and overworked customer service agent then told us, we’d get a hotel voucher but no food allowance—"We don’t do that any more.”

What’s the rationale for that? We do provide accommodation, but we expect you to spend 24 hours waiting for the one flight a day without eating? It defies logic.

We were told our suitcase was going to the warehouse. We had a choice of waiting several hours to have it retrieved, or spend 24 hours in some airport district hotel with only the clothes on our backs. 

The following day we arrived early only to find that due to mechanical problems our plane had to be changed, resulting in what was initially forecast as a 20 minute delay. When Mary wanted to ask a question about the delay, three Delta employees at the gate desk stared at their personal phones for 45 seconds before even acknowledging the presence of a paying customer at the desk.

Then when we’d boarded, we were told the catering crew didn’t supply enough bottled water for the flight causing another delay. After a total of two hours’ delay and after takeoff we were informed that they hadn’t filled up the plane’s drinking water tanks, so there would be no coffee service, and there was no water available for hand-washing in the bathrooms.

We are independent contractors, we don’t get paid vacations. That means that every vacation day is precious. And, a wasted day in Atlanta is effectively a day that we could have been working.

• We rented a car and hotel room that went unused, which begs the question: Where could Delta have done better?Why let us book a tight connection to a destination with one flight per day, with such foreseeable delays, without at least warning us?
• The pilot took a long, long time to explain the baffling first attempt at landing, which was waved off in sight of the runway at  an altitude of less than a thousand feet.
• Why not at least try to let passengers with very tight connections get off the plane first?
• How hard would it have been to contact crew of next flight to say, Hold for these people who are late through no fault of their own? Or least, don’t leave early!
• Isn’t it reasonable to use a different standard in terms of holding for delayed passengers, when the destination is served by only one flight per day?

Ironically, I’m the author of popular business book on the topic of customer service. In ‘Build a Brand Like Trader Joe’s’ I devote a chapter to ‘Gardiner’s Fourth Law of Business’ which is; “No one loves you as much as a customer who just hated you.” You guys could have made all this right with an empathetic customer service agent empowered to make a difference, or even providing a human email address when I specifically asked for one.

All along the way we were met with cold, defensive employees who had no time to listen to our concerns and were only interested in divesting themselves of responsibility. Obviously, Delta has not empowered their employees to care for their customers. Your investment in advertising would generate better returns if it was allocated to better equip employees with soft skills like empathy and compassion. 

The way we were handled added to our distress causing us to feel helpless instead of valued. Mary posted about our experience on FB and it garnered many comments from others saying they’d had similar experiences. Imagine if you could turn those people into fans rather than disgruntled former customers.

So, what did this debacle cost us?

• The night we spent at the airport Marriott in Kansas City served no purpose: $77.77
• Uber to the Kansas City hotel, because we were only going there to sleep and it was too late to ask a friend for a ride: $25.87
• AirBnB night in Turks & Caicos: $276.64
• Meal in Atlanta: $36.22
• Breakfast in Atlanta airport: $13.22
• One sixth of our vacation, the first in years: Priceless

I'd honestly like to see Delta do better, and help them do better. In my time at Trader Joe's, I came to realize just how much of an impact front-line customer service staff have on brand value. This is precisely the kind of thing companies pay me to help them with: choosing, training, and empowering employees to show empathy and build strong relationships with customers.

A lesson IKEA could learn from TJ's (but probably won't)

Last year, IKEA came to the Kansas City metro for the first time. My friends asked me if I was going to get a job there, and write a book about that brand—the way I did when Trader Joe's arrived a few years ago.

Trader Joe's customer service is to IKEA's customer service what meatballs are to poo.

I didn't, but I can't help myself, when it comes to analyzing customer service in any retail setting. What I've learned is that, when it comes to front-line customer service staff, IKEA's no Trader Joe's. Based on my observations, IKEA could learn a lot from TJ's.

Read my article on Medium here.

Stuck in line at Trader Joe's? This guy wrote a charming essay about it...

In the produce section of Trader Joe’s store in the Chelsea section of New York, Karl Holman holds an eight-foot-tall sign that reads “End of Line.” It’s six o’clock on a Tuesday, and Holman is managing the line for the second time this shift. While customers test peaches for ripeness, Holman holds the towering metal pole aloft, making the banner’s orange and yellow lettering visible to anyone who gazes up from the shelves. For the next hour, the line’s end moved constantly.

Short and stout, with a salt-and-pepper goatee and a grey Trader Joe’s T-shirt, the forty-nine-year-old Holman addresses a knot of stopped customers who are blocking traffic. “Are you ready to check out?” he asks. “Step right here.” Customers glance at his sign and then file into place.

As the line forms in front of him, he takes tiny backwards steps to keep pace with its telescoping end. His moving target keeps him in motion, and he marks it with the dedicated poise of a Beefeater at Buckingham Palace. 

Starting by the tubs of cut pineapple, he inches deeper into the produce area, backing past the baby carrots and fresh herbs, past the clear bags of salad greens, and, while smiling and greeting passersby with a “Hi, how are you?” he hooks around a freestanding rack of fruit before stopping near the entrance. In a few minutes' time he has traveled so far back that, without meaning to be metaphysical, he has transcended the proverbial end of the line and arrived at the beginning.

To read the rest of author Aaron Gilbreath's wonderful essay, and see more of illustrator Marc Pearson's cartoons of life in a busy Manhattan Trader Joe's store, check out Narrative.ly

Message to retailers: Greedy for increased profits? Then pay rank-and-file staff more

Costco's CEO Craig Jelinek is an outspoken proponent of an even-higher minimum wage than the one proposed by Obama in the most recent State of the Union address. Costco is, in fact, a sort of poster child for higher salaries for front-line retail employees.

Most retail employees earn less than Obama's wished-for $9/hour minimum rate. And while Republicans howled that raising the minimum to that level would bankrupt businesses or, at the very least cause them to stop hiring altogether, Costco's latest quarterly report proves that it's far-more-generous pay-and-benefits package hasn't hurt profits. In fact, Jelinek believes it's helped the retail giant to a quarterly profit of $537 million -- a 35% increase over the same quarter last year. By coincidence, Costco's per-employee profit is about $10,000, which is about 35% more than Walmart's.

Vice-President Joe Biden was disappointed that Costco didn't carry shotgun shells, but otherwise pleased that Costco co-founder Jim Sinegal (center) and current CEO Craig Jelinek generally support progressive policies. Jelinek recently suggested that $10.10/hour would be an appropriate minimum wage.

The average Costco worker earned $45,000 last year -- almost triple the average employee of Sam's Club (a similar warehouse store owned by Walmart). The majority of Costco's full- and part-time workers are covered by health insurance, too.

According to Jelinek, “At Costco, we know that paying employees good wages makes good sense for business. Instead of minimizing wages, we know it's a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty."

While Trader Joe's will never release profitability figures, it's certainly another highly profitable retailer that offers far better than average salaries to customer-service staff. When I was researching my book, Build a Brand Like Trader Joe's, I found tons of evidence to suggest that the correlation between higher wages and higher profits is general; it's not something that only works for certain retailers, like Trader Joe's and Costco. In Trader Joe's case, higher wages allow the chain to selectively hire the kinds of employees who will build the store's unique, idiosyncratic brand, too.

Lots 'o people love Trader Joe's. But not like Nico Lang

Millions of people love Trader Joe's. I wrote a whole book about how that happened. But Nico Lang -- whose work often appears on Chicago's NPR mega-station WBEZ -- has taken TJ's love to a new level, pledging to marry Trader Joe's.

I don't know whether Nico wants to marry the entire chain, or just one Chicago store. Or, if Illinois approves gay marriage, maybe he'll marry Joe Coulombe (though I doubt the original 'Joe' is up for it.)

In a long post on the well-written Thought Catalog blog, Lang rhapsodizes about the marriageability of Trader Joe's, comparing it favorably to such presumably marriage-worthy stars as Ryan Gosling and George Clooney.

Nico's essay may be tongue-in-cheek, but it's interesting to me that he makes a couple of points that I made in my book. (I'm not saying he listened to my interview on WBEZ, but he might have...)

You might think that we’re in the honeymoon period and that I can’t see your flaws, but I accept you — for whatever you throw my way. Is that price not correctly marked? Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it? I know why I have to travel from my “diverse” neighborhood a half an hour by bus to get to you, and why you only seem to be located in “white” neighborhoods. I understand food deserts. I know what your deal is.

I’m ready for a real relationship with you, which means calling you on your bullshit and knowing that your parents (or society) made you this way. They screwed you up, but we get better when we help each other. I see the good in you and know that sometimes instead of throwing the food that has “gone bad” away, you donate it or leave your dumpsters open for garbage pickers to reduce your food waste. You’ve got some baggage, but you’re also a force for good in the world. You care.

What fascinates me still, is that Trader Joe's fans cut the chain so much slack, in exactly the way that we excuse flaws in our friends that we'd find totally irritating in strangers. When he says, "Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it?" it's as if he's been reading this blog.

Nico has an idealist's view of marriage as something you work on. "Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it?" The implication is, of course, that Trader Joe's will actually listen.

"We have to talk" is not something that Trader Joe's famously close-mouthed senior management is ever going to respond to...

Is Lululemon founder Chip Wilson the world's most unlikely retail billionaire?

The other day I accompanied Mary on a shopping trip to Lululemon, the upscale yoga-wear retailer. Traditionalists may be disappointed to learn that 'upscale yoga' is not an oxymoron, although I know what Patanjali would say about $135 sweatpants. 

I always keep an eye on Lululemon, for a variety of reasons. One is the shocking valuation commanded by the stock. Its market capitalization is about $10 billion. In case you have trouble with simple math, that works out to well over $50 million per store. I also followed the brand's attempts to patent certain features of its trousers that make womens' butts look firmer and more shapely. 

(For the record, I believe that the creators of Lululemon trousers deserve a fabulous award for their outstanding work in this field. They've done, for posteriors, what Playtex' lift-and-separate bra did for breasts 40 years ago. Perhaps the Nobel Prize commission could institute a new category. Seriously, the trousers are that good. But, I'm not sure that a functional piece of clothing should be patentable. There's the notion of 'prior art'. But, I digress...)

Anyway, I'm guessing that investors, seeing how great womens' butts look in Lululemon think, as I do, "I want a piece of that."

Another emotional connection I have to the company is, Lululemon's roots, if you dig deep enough, go back to Calgary, Alberta, Canada. My retail roots go back to that place and time, too. Decades ago, I was the Creative Director at Mark's Work Wearhouse's ad agency and, later & briefly, the company's VP of Marketing. Those stores, now known simply as 'Mark's' were created by a friend and mentor, Mark Blumes. Blumes was a legend in Canadian retail, and certainly the most important Calgarian in the world of retail. Until, that is, Lululemon was created by Dennis 'Chip' Wilson, who was also a Calgarian. 

That brings me to the most important link I have to Lululemon: I've actually spent many, many hours cooped up in a small, basement room with Wilson.

In the late '70s, I spent a couple of hours a day working out in the weight room at the University of Calgary. For much of that time, totaling several hundred hours at least, I worked out in close proximity to Chip. This was before Arnold Schwarzenegger made pumping iron a thing; weight training was a subculture. The gym was small enough that every regular knew every other regular.

Understatement: That was also long before he found his way onto the Forbes 'billionaire' list.

Chip hung out in the U of C gym because he was a football player -- he played for the Dinosaurs, our college team and (If I recall correctly) entertained the fantasy of trying out for the Calgary Stampeders as a walk-on. He was brash and, even then, a larger than life character albeit one straight out of central casting: a self-styled Big Man On Campus. I once overheard him describing what he liked about playing football as, "I like to hit."

He wasn't CFL material; I'm pretty sure that he never did walk on at the Stampeders camp. Instead, he got a job as a 'land man' in the oil business. That was what you did, after wasting four years at university. In the hierarchy of the oil patch, there are geologists who actually find oil at the top, there are engineers who figure out how to extract and refine it below them, and there are land men who arm-wrestle farmers into locating a drill rig on their land. The essential skillset of a good land man consisted of a firm handshake and the ability to consume large quantities of alcohol at lunch, while still creating a simulacrum of work later in the afternoon.

I want to take you back to Calgary in the late '70s or early '80s, before the 1988 Olympic Winter Games transformed it into a modern, cosmopolitan city. It had already sprouted a first crop of glass skyscrapers downtown, but the vibe was anything but urbane; it was a roughneck-cowboy town with, like, one place to buy a cappuccino. 

A few blocks of Eighth Avenue, downtown, had been turned into a pedestrian mall. On warm summer days, the buildings disgorged office workers at lunchtime, and the mall was crowded. For a while, it developed into a funky outdoor street market, and people set up tables selling all manner of shit; candles, cheap leather sandals, you name it. By 1:30 in the afternoon, the office drones had gone back upstairs, and the mall was left to a few scruffy hustlers and panhandlers who'd hitchhiked in off the reserve.

One summer day, I was shouldering my way through the lunch crowd and came across Chip Wilson, who was wearing suit pants and black leather shoes, but had stripped from the waist up. That was the kind of thing he'd do, I guess. Get out of the office wearing a suit that didn't suit him, and, feeling the warm sun, decide to cop a tan. What surprised me was, he actually had a little market table on the mall, and was selling garish, baggy shorts. When I asked him where he was getting them, he told me, "I make them."

Now, we made our own stuff at Mark's Work Wearhouse, too of course. So I clarified my question. I meant, Yeah you're getting them made, but where? That's when I realized that by 'I make them' he meant, he actually sewed them himself.

Chip was not exactly a surfer dude; we were a thousand miles from the nearest surf break. But the Canadian prairies were, paradoxically, a good place for windsurfing. And as the story goes, one day he was looking for some board shorts and couldn't find any (or, any in his large size) so he borrowed a sewing machine from his mom and, after getting rudimentary instruction in its use, made his own shorts.

This was already enough to make me raise my eyebrows. If I had to pick the last person in Calgary who'd take up sewing as a hobby, I would have picked Chip Wilson. That said, he was making board shorts. It was a sort of vicarious way to be Californian, in a let's-go-surfing-then-drink-beer-around-the-bonfire way. This was not some new-age guy getting in touch with his feminine side. And if I'd suggested that, next, he'd take up yoga, he would have punched me in the face.

Anyway, in pretty short order he quit his day job, and formed a business called West Beach, which catered to the windsurfing/skateboarding scene in the summer, and sold snowboard clothes in the winter. It made sense for that business to move to the west coast, and after Chip Wilson decamped for Vancouver, he pretty much fell off my radar. 

Years later, I saw my first Lululemon store -- I think it was in Santa Monica. By then, I was living in Encinitas, California. SoCal had more yoga studios than gas stations. And while lots of yoga studios had a little rack of clothing for sale, I realized right away that Lululemon had tapped into a large and growing market. 

By then, yoga had largely been decoupled from its ascetic roots, so while I recognized the irony of high-end, expensive yoga clothes, I knew that irony would be lost on Lululemon's Lexus-driving, lotus-eating customer base. The whole thing was fascinating to me, and I asked the clerk about the store. I just about crapped when she told me the name of the founder: Chip Wilson.

Talk about cognitive dissonance. On the one hand I thought, Chip Wilson, clothing, retail; it had to be the same guy. On the other hand, if you could travel back in time to 1980, and search the entire planet to find the person least likely to start a hip women's clothing company, with a yoga theme and shopping bags printed with new age sayings... 

Honestly, you could search the whole planet and you might very well say, I've found him, I've found the least likely guy on earth, to do that: Chip Wilson.

Chip, of course, has since sold a stake in Lululemon, with the result that he's a billionaire. He's still the Chairman of the Board. He looks exactly like he did in 1980, except older. But I guess he must be a pretty different guy. I know I will never, ever, see a Lululemon logo without pondering the extreme unlikeliness of Chip Wilson. How the hell did he, of all people, end up being him?

There's a great scene in the Coen brothers' film Burn After Reading, in which the actor J.K. Simmons plays a CIA bigwig (named 'J.K. Simmons'). The film has a hilariously convoluted plot, at the end of which Simmons is given almost the final word. "I guess all we can do is learn from it," Simmons sighs, "But I sure wish I knew what we were supposed to learn."

Maybe it's that you'll find your greatness doing something you never would have imagined.

Ex-TJ's CEO spills, if not 'the beans' at least a bean or two

Doug Rauch was an early Trader Joe's employee, and served as the company's CEO from 1993-2008. He recently addressed the Western Growers' Association annual meeting in Scottsdale AZ, and spoke about the keys to Trader Joe's success.

Rauch didn't do too much to pull back the company's famous veil of secrecy, but he did present a brief history of the company highlighting the decisions management made that, in his view, turned it from "a 7-Eleven with a great wine department" in the mid-70s into the cult brand it is today.

The points he identified were...

• Buying direct from the source, instead of through wholesalers
• Reducing the number of SKUs (products) from 6,000 to 1,300 (the stores have since increased the number of SKUs to about 2,500 right now in peak season
• Remaining focused on customers. Rauch pointed out that many grocers earn more profit from fees charged to vendors than they do from sales to consumers

Rauch quoted my favorite saying, "culture eats strategy for lunch"and while he didn't come right out and make the central point of Build a Brand Like Trader Joe's, which is that the chain's real success comes from millions of pleasant personal interactions between customers and crew members, he did cite another of my favorite cultural brand examples, Southwest Airlines.

For more on Rauch's talk, visit The Produce News.

PissedConsumer.com

I have a Facebook friend who called my attention to a web site called PissedConsumer.com this morning. His post wasn't about Trader Joe's. It concerned the art supply store Michaels, and the link was to the first of many pages of bitter complaints by Michael's customers and employees (along with a few tepid defenses of the chain.)

Out of curiosity, I typed 'Trader Joe's' into the site's search field, and saw that there were pages and pages of complaints that cited Trader Joe's, too. What was the difference? As I started to read the comments, it was clear that the vast majority of the complaints were about other stores and brands, and cited Trader Joe's as an example of doing things right.

This is a typical example:

If I eat more than a couple of handfuls of Fritos or Lays potato chips, I get sick to my stomach. I contacted the company, but they didn't follow up with what I must assume they thought was a personal problem. I found a nice solution however. Trader Joe's sells a product called, "Organic Corn Chip dippers". They are very much like Fritos, don't make me sick and are cheaper. I highly recommend them for Frito lovers who are affected in a similar way or who are looking for a healthier, possibly organic snack food with a great taste and texture.

The comments on PissedConsumer are another example of the incredible strength of the Trader Joe's brand. As an insider, I continue to be fascinated by the disjunction between the quality, value (and 'values' in the larger sense) that Trader Joe's delivers in its products, and the strength of its brand/devotion of its fans. The fact that the majority of references to Trader Joe's on the PissedConsumer web site are comments like, "From now on I'll go to Trader Joe's" or "This would never happen at Trader Joe's" just underline the reasons other brands would be well advised to 'Build a Brand Like Trader Joe's.'

Trader Joe's doesn't try to be all things to all people, but they do strive to keep the customers they do have, happy. Companies, like Michaels, that don't mind alienating existing customers have obviously never done the math on customer acquisition. It costs a lot more get a new customer than it does to keep an existing customer satisfied. And with web sites like PissedConsumer now in the marcom mix, irritated customers are more corrosive than ever.

Canada's marketing industry notices "Build a Brand Like Trader Joe's"

Back when I lived in Canada and worked in Canadian ad agencies, 'Marketing' magazine was read by everyone in the business. That's why I'm pumped that Marketing is reviewing "Build a Brand Like Trader Joe's" in the issue that comes out on Sept. 19.

In the meantime, the Marketing web site has a little feature they call 'What Trader Joe's Knows'. They asked me to provide my ten commandments of building a great cultural brand. Since I always try to over-deliver, I threw in one bonus commandment. If you want to read them, go here.