“I Have Never Given Away More Than I Got Back”

Consider this situation: You have just returned home from a supermarket; when you unload your groceries, you realize that a $25 package of fresh fish, tonight’s dinner, is not in your bags. You check your receipt, and indeed, you had paid for the fish. Further imagine that early the next morning, you are leaving on a three-week trip. If you shopped at most supermarkets, you might decide that there is not much to do about the missing fish.

Recently, our family was in this situation. Fortunately for us, the supermarket was Wegmans. Wegmans is a family-owned chain of 71 stores. Their average store is three times the size of a typical supermarket. They offer everything you’d find at a traditional supermarket as well as offerings that you would typically find only at Whole Foods.

I went online to Wegmans’ site and sent them an e-mail explaining our situation with the fish. I expected to get back an e-mail encouraging us to go to the store with our receipt after returning from our trip. The e-mail I did receive was a pleasant surprise: a Wegmans’ customer service representative apologized for the mistake and promised to send us a gift card for the sum of $50. The extra $25 represented Wegmans’ way of compensating us for our inconvenience. When we returned from our trip, we did indeed find the gift card and a note of apology from the local store manager.

Wow, now that is customer service! That kind of sincere customer service can’t be faked. Superior service can only be achieved when the customer service representatives are being treated as well by management as management expects them to treat customers.

Wegmans consistently ranks at the top, or close to the top, of Fortune’s list of best places to work. Salaries are higher at Wegmans than at other supermarket chains; and over the past twenty year, the company has paid out more than $50 million dollars in college scholarships to its employees. Wegmans spends generously on employee training and eschews rigid hierarchies that prevent the training from being used effectively.

According to Fortune “Wegmans’ labor costs run between 15% and 17% of sales, compared with 12% for most supermarkets. As a consequence its annual turnover rate for full-time employees is just 6%, a fraction of the 19% figure for grocery chains with a similar number of stores.”

And how about profitability? Again, according to Fortune’s estimates, Wegmans’ “operating margins are about 7.5%, double what the big four grocers earn and higher even than hot natural-foods purveyor Whole Foods. Its sales per square foot are 50% higher than the $9.29 industry average.”

Consumer loyalty to Wegmans is fierce. Many of its customers will drive long distances to shop at one of their stores. The loyalty of Wegmans’ customers is in part due to Wegmans’ loyalty to their employees. Treating employees well leads to treating customers well. Their former president Robert Wegman who passed in 2006 said, when referring to his generous treatment of his employees: “I have never given away more than I got back.”

In Robert’s wisdom, we hear an echo of one aspect of the perennial spiritual wisdom—giving and receiving are one in the same. If we offer kindness, caring, and a generous spirit, that is what we will receive. The values that Wegmans embodies are timeless; yet because most want to receive before they give, they are not easily implemented. In today’s competitive world, there are lessons in the perennial spiritual wisdom that many companies would be wise to learn.

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7 Responses to “I Have Never Given Away More Than I Got Back”

  1. E says:

    If you live in an area where “shop and swap” (buying something and then returning it or something else in it’s place) isn’t an epidemic phenomenon, customer service isn’t much of a problem. I live in Old Town Alexandria. There’s a Shoppers Food Warehouse that gave me $10 back Johnny-on-the-spot because they double charged me for chicken. I just went over to Customer Service desk with my receipt. The Giant on Duke Street isn’t bad either. I had the “Fish Incident” happen to me and when I showed them the receipt, they just let me get one. (Same for the Alexandria Police — God Bless their hearts. Love those guys… but I suspect their superior service is due to the high-rent\high-tax district.) I’m glad you like Wegman’s, but I don’t think there’s one in Northern Virginia. As an aside, the only loyalty I am committed to is the bottom line: Show me value for dollar, and I’ll shop there. I don’t see the point in going out to the Manassas Racetrak to save .20 cents on a gallon of gas.

    You need an article on John McCain and his economic advisor, Phil Gramm, who used to be an economics professor at Texas A&M before he became Senator. Gramm is a budget-shrinking, flat-tax-embracing, free market philosopher. Interesting.

  2. E says:

    The statement “same for the Alexandria Police” was meant to describe their customer service (and not that they hand out fish and product exchanges). They’re very responsive. This isn’t a gratuitous rah-rah comment for pat-on-the-back purposes. It’s just that, for some reason, if you have a problem, they will respond (even for a stolen old bike; which, I would think, is not a substantive issue since it’s so low on the priority list).

  3. E.

    My family’s food dollar is split between Wegmans, our local natural foods store and Trader Joe’s. The interesting thing is that Wegmans has essentially replaced Whole Foods in our shopping rotation–in part because of superior service.

    Although Phil Gramm would not make Ron Paul’s team of advisors, he is about as good an economist as mainstream Washington produces. Whether McCain is using him as cover or not remains to be seen.

  4. E says:

    Professor B,

    Thanks for the response. The Whole Foods issue is… it’s a problem for me because I sense there is some validity behind the “Whole Paycheck” moniker (in certain circles, Whole Foods is nicknamed “Whole Paycheck” because of the amount of personal finance resources it absorbs).

    I know you love Ron Paul, and are more educated than the average voter about his team of advisors, but he’s a long shot for President. In life, in business, in the daily management of my affairs, I focus very little on the “long shot.” I’m a pragmatist. Friends who call me up and say, “I have a great idea” are usually asked, “what’s the model look like? What’s your worst case scenario?” Therefore, while I’m sure Ron Paul is examining important economic issues ailing our country, it’s unlikely he’ll be the next President. I spend more time reading about those who will most likely make future impacts on our lives — so that we’re not all “surprise! surprise!”, if say, in 2011, some idiot law comes down. That’s the reasoning behind asking about Phil Gramm. I’m sure McCain is using some of Gramm’s points for Cover. It’s just… well, it would be interesting to find out more about the economic policy of the leading candidates. We may very well be loading our grandchildren with an insurmountable mountain of debt, but at least… well, I personally would like to see how we’re going to dig this hole.

  5. E,

    Not only does Whole Foods cost more than Wegmans or Trader Joe’s they seem to have lost their way. I did a blog piece on Whole Foods last May.

    I’m sure I will have much to say about the candidates’ economic policy as the election unfolds.

  6. Frank v2 says:

    Dr. Brownstein,

    Ahhh, Wegman’s: my family’s favorite store. Before we moved to Baltimore we lived in Rochester, NY where Wegmans had a cult-like following. We not only bought our groceries there, but could do our dry cleaning, buy finished ready-to-go meals, pharmacy products, and even tools and hardware. It truly was a turn-key shopping store: way more than just groceries. In 2005 Fortune Magazine published a great article on the company and I have paraphrased a few key points that that support your experience and perhaps explains why they treated you the way they did.

    “It’s our knowledge that can help the customer. So the first pump we have to prime is our people” (Fortune, 2005, p.66). Employees need to understand the products and how they are to be positioned to the various target audiences. So, the staff is trained. Many of the stores managers started as teenagers and have worked their way up the organization through continuous training and education. “What good is it to offer 500 types of specialty cheeses if you can’t explain the origin of each, what type of cracker to serve them on, even what wines should be paired up” says Danny Wegman, company president (Fortune, 2005, p.66).

    In Pittsford, NY, an upscale Rochester community with strong Italian roots, they sell chocolate meatball cookies, a recipe that a bakery employee with Italian heritage brought in one day to share with fellow employees. Internal response was so positive that the employee asked Danny Wegman if she could add it to the bakery’s product offering, and he agreed (Fortune, 2005, p.68).

    In 1969 when Danny Wegman graduated from Harvard university, the closing words on his thesis were; “The mass merchandiser is the most serious outside competitor to ever face the food industry” (Fortune, 2005, p.64). The Wegman’s organization has successfully carved out a unique niche; “one-stop-shopping for every taste” (Fortune, 2005, p.64).

    It is interesting to note that Wegmans works to cross all social economic boundaries with their stores, even if the primary target audience is more upscale. “Wegmans stocks both organic gourmet fare and Coco Puffs, at competitive prices. That vast selection helps explain why in places like Rochester, Syracuse, and Buffalo, the zeal for Wegmans often boarders on kooky obsession” (Fortune, 2005, p.66).

    And when we first moved to Baltimore, my wife was one of those people that felt lost when she went shopping. She lamented about the poor quality produce and lack of selection. “Going there {Wegmans} is not just shopping, it’s an event”, says Christopher Hoyt a consultant (Fortune, 2005, p66). Wegmans received over 3600 letters a year from people asking that a Wegmans store be opened in their hometown (Fortune, 2005, p66).

    The internal family aspect of the company permeates throughout the organization and into the community. One of the key reasons that shoppers have such a positive experience in a Wegmans facility is because of the employees. “You cannot separate their strategy as a retailer from their strategy as an employer” (Fortune, 2005, p.68) according to Darrell Rigby of a global retail practices consulting firm. Wegmans’ salaries are at the higher end of the scale. Wegmans embraces their employees with excellent benefits including college reimbursement and until recently, 100% full medical coverage. Employee turnover is only 6% compared to the industry average of 19% (Fortune, 2005, p.68). A happy employees’ attitude reflects directly on the customer as well as to the employees’ own personal family. Family members are likely to shop at a store where they know that employees are happy and treated fairly.

    Wegmans has built a strong business by being able to segment their clients and offering a high value proposition to each of the different customers they serve. Creating an environment where exceptional customer service and product variety is the norm has helped to establish Wegmans as an envied and revered company in the grocery industry. As a Buffalo native spending her winter in Florida said; “I’m trying to get used to Publix. I understand Publix is rated highly. Maybe — but it ain’t Wegmans” (Fortune, 2005, p.68).

    Furthermore, for the last 11 years Wegmans has been on Fortune Magazine’s Top 100 Companies’ to work for, generally falling with in the top 5. This year (2008) they were number 3 (http://wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay?storeId=10052&identifier=CATEGORY_1381 ). So the bottom line in my mind is this: treat your employees right and they in turn will do what it takes to treat the customer right. Seems to me that is how you were treated. And as a long-time Wegmans fan, I have to say that the response from your local store was what I would have expected.

    Reference:
    Boyle, M. (2005, January 24, 2005.)The Wegmans Way. Fortune. Time Publications. P 64 – 68. New York, NY.

  7. […] ¹I’m clearly not the only person who remembers that article…as I Googled to find it, I found a few other blogs that were repeating the quote: here’s the first one I found […]

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