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Great Organizations | Great Leaders

Where Customer Service Is Big

Nebraska Furniture Mart is known for its huge stores—and its even bigger focus on customer service.
Where Customer Service Is Big

Megan Berry Barlow is from Texas where, by reputation because of the size of the state, everything is bigger. But she was taken aback the first time she visited Nebraska Furniture Mart’s Omaha location.

“When I moved from Texas to Nebraska, I didn’t work at Nebraska Furniture Mart right away,” recalls Berry Barlow, the company’s human resources director. “We needed some furniture for our new house and my husband kept telling me we have to go to Nebraska Furniture Mart. It’s so big. I said, you know I’m from Texas, how big could it be? We went, and I was actually a little bit overwhelmed. It is that large.”

Large barely begins to describe the scale of the colossal stores, located in Omaha, Nebraska; Kansas City, Kansas; and Des Moines, Iowa.  The Kansas City and Omaha locations each have a footprint of more than one million square feet, including both showroom and distribution space. A fourth store, to be located in Berry Barlow’s native Texas, is slated to open in the Dallas/Fort Worth area in 2015. It will be the largest location yet at 1.8 million square feet—with a showroom the size of 10 American football fields.

Size matters at Nebraska Furniture Mart, which prides itself on its low-price guarantee as much as on its expansive showrooms. Its locations are destinations, drawing in customers who travel hundreds of miles from all over the midwestern U.S. to shop for furniture, flooring, electronics, and appliances. But the customer experience is what matters most of all.

“If you go to any Nebraska Furniture Mart store, you’ll pretty much hear everyone sharing the same philosophy, that everything we do begins and ends with our customers,” says April Jackson, training and organizational development manager.

It’s a commitment that is carried out through the organization’s talent systems.

“Sell cheap and tell the truth”

Like many other big business success stories, Nebraska Furniture Mart’s begins with one individual: Rose Blumkin, a Russian immigrant who, in 1937, opened a furniture store in the basement of her husband’s pawn shop in downtown Omaha. “Mrs. B,” as she is still affectionately referred to within the organization (she died in 1998 at age 104; she worked at the company until she was 103), built Nebraska Furniture Mart on a simple yet timeless mantra: “Sell cheap and tell the truth.”

Selling cheap and telling the truth remains Nebraska Furniture Mart’s core operating philosophy 14 years after Blumkin’s death and nearly three decades after she sold an 80 percent stake in the business to investor Warren Buffet’s Berkshire Hathaway company. The evidence is visible everywhere in the stores, from the wide selection of offerings found in its showrooms to the cutting-edge electronic price tag system updated daily to ensure customers are getting the lowest prices. But the most important evidence is found in the organization’s customer-centered approach to its people.

“We try to write all our strategies and hire people we believe will be able to deliver an exceptional experience to our customers. That’s just who we are,” says Jackson. “We pride ourselves on being able to provide an exceptional experience for every customer that walks through our doors or shops on our web site.”

Making sure the right people are in all roles—salespeople, managers, those working in back office jobs, distribution center employees—begins with hiring those who are the right fit. To make this happen, Nebraska Furniture Mart has instituted hiring processes that combine testing and interviewing. For the testing component of the process, depending on the job for which the candidate is applying, he or she will take DDI’s job-applicable Team Member Career Battery, Customer Service Career Battery, Sales Insight Inventory, or Leadership Insight Inventory. He or she also goes through one or more Targeted Selection® behavioral interviews. The Targeted Selection® system targets the competencies and motivational fit required for success in each job.

In addition to determining whether or not the individual has the skills and ability to do the job, the process also serves to reveal whether or not the candidate is a good match with the organizational culture.

“If you don’t have the right attitude, that’s the deal-breaker,” says Berry Barlow.

Getting hired is just the beginning. Once on board, employees go through an intensive multi-day orientation program where, as Jackson points out, the focus on customer needs is emphasized throughout.

“When we do our new employee orientation, we share the history of our company, which centers around Mrs. B’s fundamentals, including sell cheap, tell the truth, and take care of our customers. And as we talk about Nebraska Furniture Mart today and our future, you can see those themes resounding throughout our culture.

Each new staff member leaves knowing that our customers come first, and we will all work together to make sure each experience is exceptional.”

New employees, as all incumbent employees did before them, also go through a customized version of DDI’s Service Plus® customer service training course, which DDI has recently re-introduced as Taking the Heat, as part of the Interaction Management®: Exceptional Performers series. The Service Plus® training helps participants recognize the business impact of customer retention, develop skills to identify and respond to dissatisfied customers, and use a set of best practices to turn difficult customer situations into positive interactions.

The training, which stretches over three days, represents a major cost for a retail organization that needs to keep people on the job, making sales and taking care of customers. But Nebraska Furniture Mart sees it as a worthwhile commitment—one that’s supported from the top of the organization.

“Our president, Ron Blumkin, who is Mrs. B’s grandson, is a great champion of Service Plus,” says Jackson. “He truly believes that the skills you learn in the course are life skills that will make you a better person and make your life easier. As a matter of fact, he’s one of our facilitators for Service Plus.

“And he really does practice what Service Plus teaches. If you see him out on the sales floor interacting with a customer or with a staff member, he never misses an opportunity to use the Key Principles taught in the course. We’re very fortunate to have him as a role model.”

It’s not just the senior leaders who support the customer service culture, but all leaders. To help them in this critical role, Nebraska Furniture Mart has established a development program for frontline leaders that incorporates courses from DDI’s Interaction Management® leadership development system.

“We did a needs analysis and tried to really understand what our managers and supervisors really needed to help them lead their teams with that mindset of always taking care of our customers, as well as taking care of our staff,” says Jackson. “All of the courses in our leadership development program are DDI courses, which allows us to reinforce the language and concepts that are in Service Plus. We’ve really set up everything around creating an exceptional customer experience.”

To track the usage of the customer service skills, Nebraska Furniture Mart relies on customer surveys. Survey questions such as whether or not the customer is likely to return to the store help gauge whether or not employees are successfully delivering the best-possible customer experience.

“You get to a point where the price alone won’t bring customers in, so the differentiator becomes how you treat your customers. Exceptional customer service is the way we differentiate ourselves from our competitors,” explains Jackson.

To further reinforce and perpetuate Nebraska Furniture Mart’s culture, Berry Barlow has begun working with senior management on a succession strategy, and on identifying and developing future senior leaders.

At only 3,000 employees, Nebraska Furniture Mart is not one of the larger companies within Berkshire Hathaway. However, Berry Barlow says that it is at the forefront when it comes to its focus on talent.

“When we go to the national meetings, we are middle of the pack, in terms of size. There are some organizations, such as Burlington Northern Santa Fe and Fruit of the Loom, which have tens of thousands of employees.

"This particular year I walked away with a sense of satisfaction for the work we do because we were focusing on the same things as some of those big guys. We’ve started to look at the people we need for the future, and what it will take to help them develop the skills necessary to keep us competitive. Those were the same things that those other, larger organizations are thinking about.”

They won’t shop anywhere else

When Jackson is asked what the payoff is for Nebraska Furniture Mart’s customer service commitment, she gets right to the heart of it.

“When I think about our commitment being successful, I like to look at sales. When sales are strong it means customers are coming in the doors, talking with our salespeople, and then they are off to tell their friends about Nebraska Furniture Mart, and they themselves come back for their future needs. If we take care of our customers, they keep coming back and they tell others to shop here.”

Jackson also speaks of customers who vow they won’t shop anywhere else, and those who proudly announce that their family has shopped at Nebraska Furniture Mart for generations. “That, to me, means that we’re really walking the talk.”

Berry Barlow says she regularly sees and hears of instances where employees are using the customer service skills they have developed.

“The last time I taught Service Plus, I had a manager come in and tell me how, the night before, he had witnessed a situation where a customer ended up being very unhappy. Then he told me about how great this one particular staff member did at taking care of the situation, how he looked for opportunities to exceed the customer’s expectations. Not only did the staff member solve the problem, but then he also took the customer’s purchases out to her car and unloaded them for her, which is really not something we typically do. It was just something else he felt he could do to really wow the customer.”

The training also helps contribute to strong employee loyalty and engagement, an area the organization tracks by surveying employees.

“Our goal would be that you would never think about going anywhere else other than Nebraska Furniture Mart to purchase home furnishing items. I would like to think the same thing about HR, that our employees are so happy that they don’t ever want a career elsewhere,” says Berry Barlow, who points out that seven percent of employees have been with the organization for 20 or more years.

Jackson concurs that Nebraska Furniture Mart is not only a customer-focused organization, but also a great place to work.

“I just think this is just such a unique organization. They figured out how to do it a long time ago, and it’s really rooted in the ability to build really strong relationships. I love working here.”


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